Coupon Clipping Going Digital: Secrets of Smart Shopping

For decades, coupons have been an important part of shopping experience for dozens of millions of people all over the world. Couponing may seem a petty thrift but it goes a long way, promoting better spending habits.

The first company to come up with this brilliant idea was Coca-Cola – back in 1887 it started massively distributing small paper tickets for a free glass of coke. Soon, there were few people in the US who hadn’t tried the beverage. Later the strategy was sophisticated, the company starting partnerships with local pharmacists who traded their customers’ personal data (just name and postal address at that time) for some Coca-Cola syrup. The huge success of this promo campaign is connected with growing number of cavities the nation suffered in the following years. Grocery companies followed the example – the second coupon was issued by a cereal manufacturer Grape Nuts. Housewives started looking for coupons in papers and magazines to use them in stores.

Through the 20th century, special deals & discounts coupons were used by many companies big and small for customer acquisition. Individuals issued them, too – some over-thrifty husbands and loving kids gave their wives and moms books of handmade coupons as a gift for Mother’s Day; the coupons offered some nice stuff like hugs, kisses or even a day free of chores.

By now the newspaper coupons are largely replaced by digital ones, provided by special coupon websites like Swagbucks, Groupon or Rakuten. One of the pioneers, the famous RetailmeNot.com was founded in 2006 to aggregate discounts from different manufacturers and stores in one place.

The customers welcomed the idea of going digital, especially when the coupons moved to their mobile phones in 2010. Today, the majority (around 80%) of retail shoppers admit they are likely to betray their favorite brands right in the store if their shopping app suggests another brand, offered with a discount. For those who prefer to buy online, there are special shopping plugins that let them know if the product they are viewing can be bought for less, or on special conditions.

The thrill of the shoppers is easy to understand, but what about the companies selling their products for less? They, too, get their share of benefits from the partnership with coupon websites and apps. Thus, according to Forbes, 86% of shoppers said that coupons encouraged them to try a new product, and 67% admitted their choice of store depended on if they could use their coupon-provided discounts there. In the long run it’s better for retailers to use coupons than maintain low prices on a regular basis. It’s psychological – buying something with a discount feels like a smart choice – even if you don’t really need or cannot really afford the product.

The business model of a coupon distributing mobile app or website is quite clear – they charge a certain fee for every deal. Such aggregator services give companies an opportunity to reach more customers and sell more goods by offering coupons, and then eat their share of the pie.

Now, the most popular apps include Ibotta, Grocery IQ, Groupon, SnipSnap, Coupon Sherpa, RetailMeNot and some others. They also offer extra features to make shopping smarter and easier. For example:

Cashback
You check the app for coupons that fit you shopping needs (say, you go shopping for groceries, and mark some special offers for cereals, sugar and pasta) and then scan the barcodes on the packages and receipts to get some money back. It can be cashed out with PayPal or another service.

In-app shopping lists
A coupon app allows you to make a list of items you plan to buy and recommends you the best coupons for your needs. Some app may even sync your shopping list with your roommates or family members to eliminate double-spending.

Digitizing paper coupons
Very convenient feature that turns your paper clippings into digital ones. The app called SnipSnap is designed for this very purpose: you snip a coupon from a magazine and snap it with your phone. The digital coupon can be applied at the store as a normal one.

Sharing customer experience
If you liked some offer, you can promote it in your networks, attracting even more customers. In an app, a coupon often has a button for sharing the deal on Facebook, Twitter or another network.

Rewards
There are apps that provide you reward points for some customer activity (not necessarily shopping). Once you have collected enough points, they may be traded for a gift card of a major retailer, like Amazon or Walmart.

Speaking of rewards, the upcoming EXSCUDO product Channels.TeamShop is based on this system, too. This group purchase service will soon be available to all Channels users, giving them an opportunity to turn their organizational skills and charisma into money. The model is simple and clear – coupon providers (EXSCUDO partners) publish their deals in the in-app catalog (say, offering a laptop with 10% discount for a group of 10). You collect a group of 10 users interested in the discounted item, grab and distribute the coupons and get your part of the discount amount. For instance, your group members get their laptops with a discount of 5%, and the rest 5% goes to your wallet. The payments are made in EON, the ‘domestic’ cryptocurrency of the app. 

As you see, coupon apps and websites, if wisely used, can eliminate a lot of unnecessary friction from your shopping process. Some may see it as a free cheese in a mouse trap, but a closer look reveals that using coupons is actually a win-win deal for all the parties involved – customers, app owners and stores or manufacturers.