Couponing is not an exact science. But it can encourage you to spend.
I wrote a number of Patents on couponing techniques. One was actually sold for a substantial sum, so I must have done something right. It is a crowded field, though, and an interesting one.
In the old days, coupons were printed on paper and you could clip them from the Sunday Supplement. Or you got them in the mail or with a product. A box of detergent might have a coupon inside with ten cents off your next purchase!
But as I noted before, chasing coupons is often a dead-end. Those "stunt buys" you see on television are just that - stunts. Some flat-faced trailer-park girl walks out with three grocery carts of groceries and not only pays nothing, but gets money back! How is this possible? Well, not shown is the hundreds of dollars she spend over several weeks and months to obtain coupons, particularly coveted manufacturer's coupons. And you have to wait for a product to go on sale and then go on double-coupon day and make a strategic buy. If they are offering 50% off on expired crackers, and you have a coupon, they might actually be free.
But as a means of feeding your family on a regular basis, well, you have to hope they like crackers! Doing these "stunt buys" is eye-candy for the television, but not a realistic everyday occurrence. If it was that easy, everyone would be doing it.
The problem with couponing is you want to hit your target audience without any overshoots or misfires. If you hand out coupons to something that the purchaser already had in their cart and was prepared to pay full price for, you are wasting money. The purchaser becomes the incidental couponer - they will take the discount, sure, but you just gave away money for nothing.
It is like these Bank of America "deals" they keep offering me. Get your windshield replaced at Safelite autoglass and save 10%! Of course, I am not about to impulse-shop for a new windshield, and since I have already used Safelite on several occasions (they repair starburst chips for free, or at least they used to, if you insured with GEICO) I am already inclined to use them. They also replaced a cracked windshield in the Frontier - for cheap, too. So the "coupon" is wasted on me two ways. It is not like I am going to run out and buy a windshield for the hell of it. Moreover, if I needed one, I would be likely to go to Safelite as a return customer anyway. 10% in addition? Sure, I'll take that!
Other things are similarly incidental And many of them are things I would never use - food delivery services, streaming services, online fashion and makeup stores, crappy fast-casual restaurants. But maybe the idea is to just put the idea in your head so when you see that store, you'll think, "I get $5 back if I spend $100! Let's go in!"
Maybe that is it.
Couponing serves a time-honored tradition in economics in the form of optimal pricing strategies. When I was young and dumb and not paying attention to money (and making lots of it and spending it as fast), I would never look at prices of things and be proud of my ignorance of prices. Stupid. Too late in life, I realized money was your income, your independence, your life, and spending it willy-nilly was just frittering away life itself. Save a few pennies here and there and it adds up - to wealth and independence. Believe it or not, some people play with their money - gambling away their very lives by betting on stupid things that never pay out and will never pay out, as the house always takes a cut, over time. But I digress....
Optimal pricing means you sell a product to the young idiot lawyer for full price, as he believes he is "rich" and doesn't need a trivial discount. But the poorer person might not buy your product at the retail price as it is too expensive. So you offer a coupon or sale and they bite on it - they can afford name-brand detergent! And so on down the line - you have a price point for every buyer, and each buyer pays the maximum amount they are willing to pay, and you optimize your profits. You sell the most amount of product and yield the highest possible price from each buyer.
If you just had flat pricing - like how we buy gas at a gas station - you would miss out on some buyers. The "rich" buyer (not really "rich" just price-insensitive) would buy, but the poorer buyer might take a pass and go for a cheaper substitute. So it is just basic good economics to offer products at different prices to different prospects - to optimize your outcome.
So couponing plays right into this. Sally Pennypincher cuts a coupon and buys Tide detergent for less. Mrs. Gotrocks pays full price. Both are happy.
Speaking of name-brand detergent, we were watching Pluto TV, which is free, but with ads (it is part of Paramount). It glitches sometimes and plays ad after ad, sometimes giving you literally ten seconds of airtime before going to ads. We watched one movie and had to turn it off as the ads became obnoxious. The next day, we watched the rest of the movie with no ads at all. I guess Pluto felt guilty about SPAM-bombing us the night before.
What was interesting was the ads and the target audience. Stripping away the ads for more television (advertising even the program you are already watching!) most of the ads were for name-brand laundry detergents and for-profit colleges. The ads all featured African-American actors, mostly women. A young woman is thinking of going to for-profit college so she can advance her nursing career and become an "administrator" and "straighten things out at the hospital!" You want to scream at the screen, "don't do it!" because blacks are often targeted by these for-profit colleges and end up with massive debts and no way to get out from under them. It is particularly obscene to entrap people this way, by attacking their very dreams.
The other ads for laundry detergents also featured black actors, and it reminded me of this urban legend of Tide laundry detergent being used as currency in the ghetto. It is not a black thing, however, just a poor thing. Poor people are more obsessed with the trappings of wealth than the wealthy. Sure, rich people can afford an expensive car. But the flashy cars - they are sold to the middle-class, the nouveau riche, and the very poor. You see more Cadillac parked in the ghetto than at the country club. Rich people don't put bling rims on their Mercedes, but a successful contractor who lives in a stucco-clad mini-mansion in foreclosure mews, he's got 'em!
So couponing serves another purpose - it allows the lower classes to buy brand-name status goods, and lets them think they are getting a "deal" in the process. Nine times out of ten, however, the store brand product is cheaper, even if you apply the coupon to the "name" brand. And many middle-class people buy these store-brand products because they really don't give a shit what some stranger thinks of them, looking in their shopping cart.
Kiosks are another way of distributing coupons, and I wrote some Patents on this as well. You go to the store and enter your frequent shopper number and the kiosk prints out a sheaf of coupons, based on what is on sale and what you bought in the past. If you bought store-brand detergent a month ago, maybe you are due for a new bottle of it, and it is an opportunity to get you to switch to Tide. So it prints out the coupon, or today, transmits it to your smart phone (which may even detect you are near the store or even what aisle you are in!).
I digress a bit, but that is ostensibly another reason for couponing - to get people to switch brands. A lot of people are obsessively brand-loyal, and once they latch onto a particular brand of product, they will stick to it for life - even as the price doubles and the quality goes in the toilet. If you can latch onto their buying preferences early on, you may have a customer for life. On the other hand, if you can get them to merely try your product, maybe they will switch, based on product satisfaction.
I say "ostensibly" as brand-loyalties, as I noted, are strong among the hoi polloi and thus hard to change. Also, maybe it is just me, but unless a product really, really sucks, I don't see much difference between various brands, particularly with regard to things like soap. The only laundry detergent I won't buy is the stuff from dollar tree, as it is watered down so much you are paying more for the packaging than the product.
Other products, I may be a fan of, until they raise the price and I find another alternative. So the idea of brand loyalty, to me, is idiotic in the first place. The idea that I will "switch brands" forever, because of a one-time coupon is even more ridiculous. I mean, if store brand is cheaper, I will go right back to that unless they provide me with infinite coupons.
But that's just me, and others play right into the merchant's games.
But getting back to couponing, it has gone electronic and indeed, that is where I came in, writing Patents on this stuff. There are all sorts of ways merchants can get inside your head and figure out what it is you really want, or worse yet, make you want something you had no real need for. The best psychologists are working in retail - not as checkout clerks, but as executives at companies that sell consumer goods.
As more and more commerce goes online, so has couponing. And "Coupon Codes" (finally got to the topic, eh?) are being used to give discounts to people to induce them to spend. For example, I go to buy a pair of sneakers and they offer 15% off if I sign up for an e-mail newsletter. So I do, figuring I can always mark it as SPAM later on and make it stop. They give me a coupon code and I enter it and....
....nothing. You see, the sneakers I was buying were "on sale" and items "on sale" don't qualify for the coupon code. Tellingly, nearly every item on the sneaker merchant's site was on sale. So the coupon codes were pretty worthless, unless you wanted to spend $200 on a pair of their more expensive sneakers. But who does that, honestly! A lot of people do - people who can least afford it, too. Remember what I said about the poor and luxury goods.
As with paper couponing there is the risk of the misfire or overshoot. When I check out on a site, I open a new tab and type in "SITEXYZ COUPON CODES" and usually get a number of sites purporting to give away coupon codes for SITEXYZ. Of course, most of them are junk - claims of 70% off with a coupon code are nonsense. Usually there is a 10% coupon for new customers or something of that nature. These sites usually try to open a window for SITEXYZ so they get a referral fee. .I usually close that window.
Sometimes these codes work, sometimes not. Sometimes you can even spoof them. I get a coupon code for "NEWUSER10%OFF" and try it. It works. So I try "NEWUSER15%OFF" and it works as well. The game ends at 20% off - it never hurts to try. Some wag opined that you could try "VETERAN" or "MILITARY" and likely get a discount. I leave the morality of such shenanigans to you.
Again, this is a misfire. I am taking a discount, not because I was lured to their site or because of a sale promotion, or because I signed up for the newsletter, but only because I plugged in about a half-dozen codes I found online and then took the one with the highest discount. This is not how couponing is suppose to work. I mean, I was prepared to pay full price for those sneakers and now they're giving me 20% off for nothing? No customer loyalty, not brand-switch inducement, no optimal pricing strategy. It defeats all of these couponing strategies.
Worse yet, most are not very good deals. Like I said, the sneaker site only applied coupons to full-price items. So they short-circuit the whole thing by offering nearly every product "on sale" - with no one ever actually paying the "suggested retail price" anyway. The coupon code becomes a joke.
Online shopping does present challenges to retailers in applying coupons to a virtual world. Since coupon codes are generic, they can be shared with an infinite number of people. Of course, there are ways around this as well - you could make a unique code for each user. However that would require a sizable "code" which would be a gibberish of numbers and letters and hard for the user to remember and type in, unless they could cut-and-paste it, or have it automatically entered.
Maybe couponing, as we know it, is dead. Or maybe it will be taken to the next level. I am not sure. I suppose in a future world, your smart phone would show you (and only you) unique prices on every good in the store, with pricing based on your shopping habits, annual income, net worth, various other demographic data. Already some stores are using QR codes in place of prices, so they can raise prices in real-time, without having to change placards on the shelves. So it would not be hard to show different people different prices, depending on who they are and what their desires are.
For example, Joe Six-Pack is a Coors Light fan, and has been since he puked it up behind his high school when he was 16. So he buys Coors Light and only Coors Light (even though they sponsor gay pride events!) his whole life long. There is no need to offer him a coupon or discount on something he is going to buy anyway. So he pays full price, a price just reasonable enough that he won't switch. If the algorithm detects he bought a six-pack of Miller Lite last week, they might lower the price on Coors and send him a virtual "coupon" as inducement to get him back into the fold. Or conversely, Bud Light might coupon him, trying to get him to switch brands. It becomes a fascinating battle of wills, and perhaps Joe occasionally buys another brand of beer just to spoof the algorithm and get it to send him a virtual coupon.
People learn very quickly.
In a way, all of this is very frightening, as it involves using psychology to alter our behaviors - something the smart phone and Internet are already doing at an alarming pace. I for one, prefer simple transaction - the more complicated you can make any transaction, the worse-off the consumer is. If you can get people chasing discounts, they often forget about overall price. The local "fancy" grocery store relies on sales and "BOGOs" to bring in customers. But even at the BOGO price, the goods are often more expensive than the everyday price at Walmart or the wholesale club.
Again, they get into our heads, and "Buy One Get One FREE!" resonates with a lot of people, as they believe they are getting something for free, and not just at 50% off a "retail" price that no one in the history of mankind has ever paid.
I am not sure what the future of couponing will entail, and in fact, I don't think the retail industry knows full well just yet. Whether this becomes part of a dystopian future where we are all given tattoo barcodes or implanted chips and our every movement monitored and our behaviors induced to the greater good of humanity (read: the ruling class) or whether it will be a more benign method of inducing sales through discounts, well, that remains to be seen. Already, retailers are offering minor discounts to shoppers if they in turn give up some of their privacy. People claim to cherish their privacy, but will sell their soul for ten cents off a packet of Jello.
Myself, I will continue to seek out the simple deals. You put a product on the shelf and put a price on it. I decide to buy - or not to buy. That keeps it really simple.
But of course, if you offer "coupon codes" on your website, I will try to spoof those and obtain a windfall discount, if I can.
I mean, I'm not that stupid!
