With a deep recession and stubbornly high unemployment, coupon clipping has taken on a new life. But does scanning the newspaper and magazines for small savings add up to significant savings?
Clipping coupons may be a painstaking process, but it could be time well spent. According to the Wall Street Journal, an hour spent looking for, and clipping coupons, can yield as much as $100 in savings.
When the economy went into a freefall in October 2008, coupon use suddenly skyrocketed, according to coupon processing agent Inmar. Since that time, coupon redemption has enjoyed five straight quarters of double-digit growth.
In 2009, for the first time in 17 years, consumers used more coupons than they did the year before, with 3.3 billion consumer packaged goods coupons redeemed, an explosive 27 percent increase over the 2.6 billion redeemed in 2008.
The increase in redemption went hand-in-hand with an increase in distribution. Despite the tight economy, marketers invested heavily in coupons, boosting the number available to the highest level in over 30 years. Brands issued 367 billion coupons, at an average face value of $1.44.
Finding coupons
Where do you find coupons? There are a variety of sources, but consumers continue to find most coupons in their local newspaper. News America Marketing, which operates SmartSource Magazine and SmartSouce.com, says newspapers account for 89 percent of coupon distribution and over half the coupons redeemed each year come from that source.
But increasingly, consumers are turning to Web sites for online coupons. Internet distribution was up 92 percent last year and consumer redemption of these coupons was up over 360 percent, according to Inmar. That's reflected in traffic on coupon Web sites.
"There has been a noticeable increase in (SmartSource.com) page count over the past year," said News America Marketing VP of Marketing, Jesse Aversano.
Online coupon source Coupons.com reports more than 45 million American consumers are now using online coupons, up from 38 million in 2008. Of the 45 million online coupon users, the company says almost one third (13.1 million) do not clip coupons from their Sunday newspaper, a 140 percent increase over 9.4 million in 2008.
Less user-friendly
In fact, consumers are embracing coupons so enthusiastically that Inmar notes some marketers are taking a step back, in an effort to preserve their profit margins. As a result, the firm says, coupon redemption is now less user-friendly and savings per coupon have declined slightly. The company reports:
• Face values dropped by five percent in the third quarter of 2009 vs. the same three-month period in 2008.
• Expiration periods of the coupons distributed saw a 17 percent decline in the third quarter. What's more, consumers actually started responding to coupons with a much shorter life span; we have seen a 44 percent decline in the average expiration period redeemed. While consumers once demanded expiration period into the 5-6 month timeframe, they are now responding closer to the industry average of 2-3 months.
• Purchase requirements are generally lower, requiring consumers to purchase only one product nearly 75 percent of the time. However, when multiple products are required, the number of products required is much higher than the same time last year.
Meanwhile, consumers appear to find the biggest savings when it comes to food coupons. In 2009 Coupons.com found ready-to-eat cereal, yogurt, sweet snacks, refrigerated dough and salty snacks to be the top five coupon redemption choices.
