TARPON SPRINGS, Fla. -- Consumer use of frequent shopper cards is soaring. But that doesn't mean customers are turning away from more traditional forms of promotional vehicles such as coupons distributed by freestanding inserts.
Consumers who consistently take advantage of electronic coupons and other innovative promotional tools are also likely to make use of a wide range of traditional savings options, according to Jane Perrin, senior vice president of NCH Promotional Services, Lincolnshire, Ill.
In addition, while shopper participation in frequent shopper programs and use of electronic coupons is growing rapidly, traditional couponing remains the dominant force for reaching consumers with promotional offers, she said.
Perrin, in a talk titled "Consumers and Coupon Usage: A Look at Consumer Shopping Behavior," revealed the highlights of a nationwide consumer study on coupon usage at the fourth annual Conference on Electronic Marketing here. The conference was co-sponsored by Retail Systems Consulting, Tampa, Fla., and SN and Brand Marketing, both of which are published by Fairchild Publications, New York.
According to the NCH study, which was based on 1,000 to 2,000 telephone interviews nationwide, nearly one-third of consumers now are members of frequent shopper programs, and nearly one-quarter participate in the programs on a consistent basis.
"The neat thing about this statistic is that the [growth] has taken place in just a three-year
period. The percentage of shoppers who use frequent shopper cards has doubled since 1993, from 12% to 24%," Perrin said. In addition, that percentage will increase to at least 30% within the next year, she added.
The industry is "looking for new ways to distribute coupons electronically. There's a company that's going to be introducing a program in January that will distribute coupons off a printer in the consumer's home.
"There are more and more types of electronically distributed coupons out there today. I get a call at least once a week from someone with a new innovative method to distribute coupons," Perrin said.
But the burst in interest in electronic couponing and frequent shopper programs doesn't mean consumers, or manufacturers, are seeking to abandon the use of traditional paper coupons.
"Over the past five years, the consumer has saved $22 billion using coupons, so I think it's going to be a hard task to get rid of paper coupons. Somehow, we're going to have to replace that savings if we're going to look at new vehicles.
"Maybe we'll replace it with different types of promotions or vehicles, but there's a lot of couponing out there that the consumer is using," she said.
In another sign of couponing's power, Perrin pointed out that the number of coupons redeemed has grown from 2.1 billion in 1975 to 6.2 billion in 1994, almost tripling in the past 20 years.
The bottom line, Perrin said, is that most consumers are price and value sensitive and will participate in frequent shopper programs along with, but not necessarily instead of, more traditional promotional programs.
Among the study's findings pointing to the bottom-line orientation of consumers:
More than 75% of the study's participants said they always or sometimes buy store brands instead of national brands in one or more categories and 81% said they compare prices between brands on a consistent basis.
About 50% of shoppers said they switch stores on a consistent basis to take advantage of special offers. "So they are very aware and they are switching stores," Perrin said.
More than 65% of consumers use coupons on a regular basis and about 50% shop at stores that offer bonus coupons, meaning double- or triple-couponing. "Shoppers are extremely aware of promotions. They play a critical role in their shopping decisions," she said.
About two-thirds of consumers enrolled in a frequent shopper program nevertheless still use traditional coupons regularly. Specifically, 27% of survey respondents with frequent shopper cards said they always use manufacturer paper coupons, and 40% said they sometimes use them. "I mean, two-thirds of consumers with frequent shopper cards are also using coupons. They're not just relying on their cards. So if you're going to distribute coupons, manufacturers, you have to think of overlapping promotions you have, because consumers are going to use both of them. They are going to take advantage of anything they absolutely can," Perrin said.