www.dmnews.com | December 1, 2008 | DMNEWS | 19
Price importance by category
Coupon use
How important is price when making purchasing decisions on the following items? Very important
Travel
How has your use of coupons received in the mail for these products changes in the past year?
Somewhat important
65%
90%
25%
Increased a lot
62%
Electronics Groceries
57%
Home furniture
56%
Auto parts
53%
Entertainment
46%
Paper and office supplies Health & wellness products
32%
31%
89%
Health & wellness products
29%
40
80
0
33%
22% 22%
33%
19%
30%
14% 21%
Home furniture 7%
100
38%
27%
Travel 11%
80%
39%
26%
Paper & office 11% supplies
66%
41%
27%
Auto parts 11%
75%
60
14%
Electronics 11%
82%
39%
30%
36%
Entertainment 13%
84%
36%
41% 20
Groceries
88%
32%
46%
0
92%
30%
Increased a little
10
20
30
40
50
60
70
80
Promotional offers leading to purchase
Coupon receipt preference
What percentage of promotional offers or coupons that you receive by mail ultimately lead you to purchase?
How do you prefer to receive coupons? Mail
78%
6%-10%
24%
63%
1%-5% 11%-20%
52%
Newspaper inserts
Web sites Don’t want to receive coupons
11%
34%
21%+
8%
3% 0
51%
10
catalog every Christmas — which is also available online — and this year the retailer also produced a 48-page gift guide sent by direct mail, which emphasizes affordable gift-giving. Robert Ladd, senior director of consumer marketing at St. Louisbased cable company Charter Communications, which sends out 150 million pieces of mail per year, did not find the study results particularly surprising. “[That] the vast majority of consumers review their mail daily, we see that in our call volume responses that we track,” he says. “We find that direct mail is clearly effective for us in driving the business both with prospects with whom we do not yet have a relationship and also with our existing customers, because it helps them understand the services we have available.” And, given the current state of the economy, it’s certainly not surprising that the survey highlights the importance of pricing when making purchase decisions — it has increased among 69% of consumers compared to six months ago.
20
30
40
50
60
70
This supports the commonly held belief that today’s consumers are allocating home budgets according to a need vs. want test. For example, the survey found that pricing is most important for consumers making purchasing decisions within travel or electronics categories, which are generally perceived in this economy as non-necessities. However, with health and wellness products, for example, pricing isn’t as crucial to consumers. “I think businesses as a whole know that discounting is a strategy that can help stimulate purchases — especially in
0%
6%
80
hard economic times and with the holidays coming up, people are trying to tighten up their purchase habits and make their money go farther,” says Amy King, VP of business intelligence and insights at coupon powerhouse Valpak. “Discounting is something retailers that we haven’t seen discounting before will get involved in.” Retailers are taking to discounting strategies and using coupons as incentives – but some are even reinventing the coupon. Recently, King received a discount offer from a high-end accessories company. “It was presented as a nice little gift card, but it was a coupon nonetheless,” she says.
TM
According to the DMNews/ Pitney Bowes survey, the level of discount is the most important consideration for redeeming a coupon — in general, consumers expect at least a 10% to 25% discount for coupons received in the mail. Coupons offering discounts on grocery purchases are the most likely to be used, followed by entertainment and performances, and electronics. The expected level of discount is highest for bigger ticket items such as furniture and travel purchases. Importantly, 25% of consumers say they require a 50% discount to motivate a purchase. One in five consumers reports more than 10% of the offers or coupons they receive lead to a purchase. Direct mail’s staying power encourages consumers to redeem coupons for strong, well-crafted, well-targeted offers, King says. “Some people have this ‘I don’t want to purchase anything’ mindset right now, but they’re still interacting with their mail and have that in their face every day,” she explains. “They say, ‘Maybe I didn’t want to
JCPenney continues to invest strongly in direct mail, including this 48-page holiday gift-giving guide that was produced for 2008