Site icon Coupontoaster Blog

The Impact of Coupons & Freebies on Business Growth

Julia Ching
The Impact of Coupons & Freebies on Business Growth

Some Research Based Facts:

These statistics collectively illustrate that coupons, especially digital ones, play a significant role in driving consumer behavior, increasing spending, and potentially contributing to business growth. However, direct year-over-year growth percentages specifically from coupon usage alone are not explicitly provided in the data excerpts but inferred through increased spending and consumer behavior

Coupons and freebies have long been a staple in the marketing strategies of businesses. These promotional tools can significantly influence consumer behaviour and drive business growth across various industries. By offering discounts or complimentary items, companies can attract new customers, retain existing ones, and boost sales. This article explores the impact of coupons and freebies on different sectors, showcasing their effectiveness in promoting business growth.

The Birth of the Coupon: A Simple Idea That Changed Retail

Coupons first showed up way back in 1887. Coca-Cola, a new drink at the time, was behind this clever idea. They gave out handwritten tickets for a free glass of Coke. It was a simple way to get people to try their new drink.

Imagine you’re living in the late 1800s. You’re walking down the street and someone hands you a small piece of paper. It says you can get a free glass of this new drink called Coca-Cola. You’ve never heard of it before, but hey, it’s free! So you go to the soda fountain, hand over your little paper ticket, and try your first-ever Coke. You like it, and next time, you might even pay for one. That’s how Coca-Cola used the very first coupons to grow their business.

This idea caught on fast. By the early 1900s, lots of other companies were using coupons too. Cereal companies put coupons in magazines. Grocery stores gave out coupons for discounts on food. People started to look for these coupons and use them to save money on their shopping.

The Coupon Craze: How Paper Coupons Changed Shopping

As time went on, coupons became a big part of how people shopped. In the 1930s, during the Great Depression, coupons were really important. People didn’t have much money, so saving a few cents on groceries made a big difference.

Let’s say it’s 1935. You’re a mom trying to feed your family on a tight budget. Every Sunday, you sit down with the newspaper and cut out all the coupons you can find. Maybe you find a coupon for 5 cents off a loaf of bread, another for 10 cents off a pound of butter. You carefully clip these coupons and put them in your purse. When you go to the grocery store, you hand over your coupons at the checkout. Those few cents you save might mean you can afford to buy your kids a treat, or put a little money aside for a rainy day.

This is how coupons became a regular part of shopping for many people. Stores started to expect customers to use coupons. They would plan their sales around coupons, knowing that a good coupon could bring in lots of customers.

The Rise of the Coupon Queen (and King)

As coupons became more common, some people got really good at using them. These “extreme couponers” would spend hours cutting out coupons, organizing them, and planning their shopping trips to save as much money as possible.

Picture this: It’s the 1980s. You’re really into coupons. You have a big binder full of them, all sorted by product type and expiration date. You plan your whole week’s shopping based on what coupons you have. You might go to three or four different stores to use all your coupons. Sometimes, you can even get stuff for free by combining coupons with store sales. It takes a lot of time and effort, but you’re saving hundreds of dollars on your shopping. You feel like you’re beating the system, getting great deals that other people are missing out on.

This kind of “extreme couponing” became almost like a sport for some people. They’d brag about how much they saved, and share tips with friends and family about the best ways to use coupons.

The Digital Revolution: Coupons Go Online

As the internet became a bigger part of our lives in the 1990s and 2000s, coupons started to change too. Stores began to offer coupons on their websites. Instead of cutting coupons out of the paper, you could print them at home.

One of the first big players in online coupons was Coupons.com, which started in 1998. They let people choose coupons online and print them out. This was a big change – you didn’t have to wait for the Sunday paper anymore to get coupons.

Imagine it’s 2005. You’re planning your weekly shopping trip. Instead of spreading the newspaper on the kitchen table, you’re sitting at your computer. You go to a coupon website and see all the available coupons. You click on the ones you want, hit print, and out they come from your printer. It’s faster and easier than cutting them out by hand, and you can find coupons for exactly the products you want.

The Smartphone Era: Coupons in Your Pocket

As smartphones became popular in the late 2000s and early 2010s, coupons changed again. Now, you could have coupons on your phone. Stores started making apps that would give you coupons right on your phone screen.

Let’s say it’s 2015. You’re at the grocery store, and you remember you forgot to check for coupons before you left home. No problem! You pull out your phone, open the store’s app, and find a coupon for the cereal you’re about to buy. You show the cashier the coupon on your phone screen, and you get your discount. It’s quick, easy, and you don’t have to worry about forgetting your coupons at home.

This change made using coupons easier than ever. You didn’t have to plan ahead or spend time clipping coupons. You could find and use coupons right when you needed them.

Are We Really Saving? The Psychology of Coupons

Now, you might be wondering: are we really saving money with coupons, or are stores just tricking us into buying more?

The truth is, it’s a bit of both. When you use a coupon, you are saving money on that item. If you were going to buy it anyway, then you’re definitely saving. But stores and brands use coupons to encourage us to buy things we might not have bought otherwise.

Think about it this way: You’re shopping online for a new pair of shoes. You find a pair you like for $100. As you’re about to leave the site, a pop-up appears offering you a 20% off coupon if you buy today. Suddenly, those $100 shoes are only $80. It feels like a great deal, so you buy them. You did save $20, but the store got you to make a purchase you might not have made without the coupon.

This is how coupons can be a win-win for both shoppers and stores. You get a discount, and the store makes a sale they might not have made otherwise.

The Power of the Limited-Time Offer

Stores often use limited-time coupons to create a sense of urgency. This can have a big impact on our decision to buy.

Let’s create a scenario: You’re browsing an online clothing store. You add a few items to your cart, totaling $150. You’re not sure if you want to spend that much, so you decide to think about it and close the website. An hour later, you get an email from the store. It says, “We noticed you left some items in your cart. Here’s a 15% off coupon, but it expires in 24 hours!”

Now you’re faced with a decision. If you use the coupon, you’ll save $22.50. But if you don’t use it soon, you’ll miss out on the saving. This kind of offer often pushes us to make a purchase, even if we weren’t completely sure about it before.

This tactic is very effective for stores. It not only encourages people to complete purchases they were considering, but it also creates a positive feeling. You feel like you got a special deal, which makes you more likely to shop with that store again in the future.

Coupons and Customer Loyalty

Coupons aren’t just about single purchases. They’re also a tool for building customer loyalty. Many stores use coupons as part of loyalty programs to keep customers coming back.

For example, think about a drugstore chain. They might give you a coupon for 5% off your next purchase every time you buy something. This encourages you to come back to their store instead of going to a competitor. Over time, you get used to shopping there, and it becomes your go-to online phramacy.

Some stores even use personalized coupons based on your shopping history. Let’s say you often buy diapers at a certain store. They might send you coupons for baby products, knowing you’re likely to use them. This kind of personalized approach can make customers feel valued and understood, increasing their loyalty to the store.

The Rise of Coupon Websites and Apps

As online shopping has grown, so have websites and apps dedicated to finding and sharing coupons. Sites like RetailMeNot, Groupon, and Rakuten (formerly Ebates) have become popular ways for people to find deals.

These sites work by collecting coupons and deals from many different stores in one place. Some of them also offer cashback on purchases, which is like an extra coupon on top of any discounts you’re already getting.

Imagine you’re planning to buy a new TV. Before you buy, you check a coupon website. You visit different websites let’s say Appliances Direct, Argos, Costco or anyother store, you find a coupon code for 10% off for your product you might end up purchasing from the site offering the best deal. You might even see that if you click through from the coupon site, you’ll get 3% cashback on your purchase. By taking a few minutes to check for these deals, you could save a significant amount on a big purchase.

The Impact of Coupons on Business

For businesses, coupons are a powerful tool. They can use coupons to:

  1. Attract new customers
  2. Encourage existing customers to buy more
  3. Clear out old stock
  4. Introduce new products
  5. Compete with other stores

Let’s look at an example of how a store might use coupons strategically. Say a clothing store is trying to clear out their summer stock to make room for fall clothes. They might offer a coupon for 40% off all summer items. This encourages people to buy these items, even though summer is ending. The store makes money on products that might have gone unsold, and customers feel like they’re getting a great deal on clothes they can wear next year.

Are Businesses Losing Money on Coupons?

You might wonder if businesses are losing money by offering all these discounts. The answer is: not usually. Businesses carefully calculate their coupon offers to make sure they still make a profit.

Here’s how it works: Let’s say a store normally sells a shirt for $50. It might cost them $25 to buy that shirt from the manufacturer. If they offer a 20% off coupon, the customer pays $40 for the shirt. The store still makes $15 profit, which is less than they would have made at full price, but it’s still a profit. Plus, the coupon might have encouraged the customer to buy something they wouldn’t have bought otherwise.

Also, coupons often lead to additional purchases. You might go to a store to use a coupon for one item, but while you’re there, you see other things you want to buy. This is why stores are usually happy to offer coupons – they know it often leads to more overall sales.

Coupons in Retail Industry

In the retail industry, coupons serve as a powerful incentive for customers to make purchases. Retailers frequently use them to entice shoppers, especially during sales events or holiday seasons. For instance, a clothing store might offer a 20% discount coupon to draw in customers. This not only increases foot traffic but also encourages bulk buying, as customers aim to maximise their savings. Coupons have been a part of shopping for over a century now. They’ve changed how we shop, how stores sell, and even how we think about saving money. Let’s take a trip through time and see how coupons have grown from little paper slips to digital codes that can save us big bucks with just a click.

Digital coupons have changed the retail landscape. Online retailers leverage email newsletters and social media to distribute discount codes, reaching a broader audience. This strategy not only improves online sales but also builds customer loyalty by providing exclusive deals to subscribers. As a result, retailers can see a significant uptick in both online and in-store sales through the strategic use of coupons.

Freebies in the Food & Beverage Industry

Enhanced Customer Acquisition and Retention:

Strengthening Brand Loyalty:

The food and beverage industry frequently utilises freebies to introduce new products and encourage trials. Offering free samples in supermarkets or at events allows consumers to taste and experience products without any financial commitment. This method is particularly effective for new or lesser-known brands aiming to build a customer base.

Restaurants often provide complimentary items to enhance customer experience and foster loyalty. A café might offer a free dessert with the purchase of a meal, enticing customers to dine in more frequently. Such promotions not only increase immediate sales but also create a positive impression, encouraging repeat visits and word-of-mouth referrals.

Coupons & Freebies in the Gaming Industry

In the gaming industry, coupons and freebies play a key role in user acquisition and retention. Game developers often distribute discount codes for in-game purchases or offer free content updates to keep players engaged. This approach helps in maintaining a loyal user base and attracting new players who are enticed by the prospect of additional benefits.

Have you noticed how you see poker freeroll tournaments, where players can enter without any fee and compete for real prizes. This approach not only boosts player participation but also enhances the overall gaming experience, making it more enjoyable and rewarding. By leveraging such promotional tools, gaming companies can significantly increase user engagement and push overall revenue growth.

Freebies in the Beauty and Personal Care Industry

The beauty and personal care industry thrives on the concept of product sampling. Brands often distribute free samples of new skincare or makeup products to entice potential customers. These samples are typically given out in stores, through online orders, or at beauty events. By allowing customers to try products before purchasing, companies can increase the likelihood of conversion and build brand trust.

Beauty subscription boxes have also become a popular way to distribute freebies. Subscribers receive a monthly box filled with sample-sized products from various brands. This not only introduces consumers to new items but also encourages future purchases of full-sized versions. The strategy of providing freebies helps beauty brands to expand their customer base and encourage sales effectively.

By strategically utilising coupons and freebies, businesses across various industries can foster growth, enhance customer satisfaction, and increase revenue. Whether through digital discount codes, free samples, or exclusive offers, these promotional tools remain a vital component of successful marketing campaigns.

The Future of Coupons

As technology continues to advance, coupons are changing too. Here are some trends we’re seeing:

  1. Mobile wallets: More people are storing coupons in digital wallets on their phones, making them even easier to use.
  2. Location-based coupons: Some stores are experimenting with sending coupons to your phone when you’re near their store.
  3. Personalized offers: Using data about your shopping habits, stores can offer you coupons for things you’re likely to want.
  4. Social media coupons: Many brands offer special coupons to their followers on social media platforms.
  5. Automated savings: Some apps and browser extensions automatically apply the best available coupon codes when you’re shopping online.

The Bottom Line: Are Coupons Good for Us?

After looking at all this, you might wonder: should we use coupons? Are they really helping us save money? The answer can be simple or complex based on your situation. Coupons can definitely help you save money, especially on things you were going to buy anyway. If you’re careful and disciplined, you can use coupons to significantly reduce your spending.

However, coupons can also lead us to buy things we don’t really need, just because they’re on sale. They can make us feel like we’re saving money, even if we’re actually spending more than we planned.

The key is to use coupons wisely. Here are some tips:

  1. Only use coupons for things you were already planning to buy.
  2. Don’t let a coupon push you into a purchase you’re not sure about.
  3. Compare prices even with coupons – sometimes, another store might be cheaper without a coupon.
  4. Be aware of expiration dates, and don’t buy things just because a coupon is about to expire.
  5. Remember that the best way to save money is often to buy less, not to get discounts on more purchases.

In the end, coupons are a tool. Like any tool, they can be really useful if you use them right. They’ve changed a lot since that first Coca-Cola ticket in 1887, but their basic purpose is still the same: to help businesses sell more and to help shoppers save money. As long as you’re smart about how you use them, coupons can be a great way to stretch your budget and get more for your money.

Exit mobile version