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Consumers seek out promotions as economic downturn bites
Archived article dated Thursday June 12th 2008
Research reveals consumers are more promotionally responsive than 12 months ago
According to independent market research commissioned by promotional solutions business Valassis, economic concerns are starting to bite as rising high street prices force consumers to seek out financial promotions with renewed enthusiasm and vigour.Harking back to post-war Britain and the days of the ubiquitous Green Shield Stamps, consumers are once again arming themselves with financial promotions like the paper coupon to fight against the rising cost of the weekly shop.
The research revealed that 30% of consumers are more actively seeking out promotions than they were 12 months ago. Of these people, 75% cited a rise in the cost of food and the general cost of living as the main reasons for their being more promotionally responsive.
17% of the respondents went on to say that they are more receptive to receiving coupons in the post. In these leaner times, the coupon offers a tried and tested way for consumers to cut their grocery spend.
Charles D'Oyly, managing director of Valassis, comments, “Our research proves that consumers are more actively seeking money-saving promotions than they were 12 months ago, and welcoming coupons into their homes as a practical and proven solution to the rise in cost of the weekly shop.”
The US, which entered its economic downturn before the UK, has reported an even greater rise in the demand for coupons from shoppers. In recent research conducted by ICOM, 67% of US consumers said they intend to use more coupons in light of the economic downturn. This goes to show - the results are not just a timely coincidence, rather further evidence that the UK may be heading down the same road, and that consumers become more promotionally responsive in an economic downturn.
Valassis in the UK has witnessed a sharp increase in the use of coupons in times of financial hardship in the past. For example, during the last recession in 1991 as compared with 1990, Valassis reported a 60% rise in coupon distribution and a 17% rise in the volume of coupons actually redeemed. In light of the current statistics, D'Oyly predicts their growth to the same or even higher levels this year.
Valassis has also revealed that a leading supermarket has observed a sharp increase in the number of consumers entering its stores with shopping lists and calculators. Consumers are, quite literally, counting the pennies and shopping with renewed determination to reduce their bills.
Brands are in a similar position to consumers as their marketing and promotional budgets are under increasing pressure to deliver results. D'Oyly comments, “In the new climate brands must compete harder to win the sale and hold on to market share. However, brand managers need to invest their promotional budgets wisely. They have to ask themselves whether they are running the right promotions to deliver the optimal return on investment from their promotional activity.”
While many believe that the UK is yet to feel the full impact of the credit crunch and growing inflationary pressures, coupons - like hard cash - are becoming more important to UK consumers as they fight against the spiralling costs of living.
Tagged as: voucher | loyalty | consumers | valassis
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