Getting Hip With the Clip: Stores, Consumers Embrace Coupons Amid Sour Economy

No, that's not snow you see falling: This holiday season, a flurry of coupons is hitting local shoppers, from familiar grocery brands, high-end apparel shops and plenty of merchants in between.

The surge is a product of the current recession, retailers and industry experts say.

At a time when business-starved retailers are battling to lure customers with the lowest prices, coupons have the power to quickly push hesitant consumers off the couch and into the checkout line. So merchants, even many that are traditionally coupon-shy, are issuing more of them with the hope you'll respond.

"Coupons (are) probably the best way to say, 'We've got the best deal and we're going to give you a bargain,'" said Mike Gatti, executive director of the Retail Advertising and Marketing Association, part of the National Retail Federation. "There are a lot more coupons floating around out there this year. Nobody's hiding the fact that things are on sale."

In an NRF survey of nearly 9,000 consumers this month, 44.6 percent said coupons influenced them to shop at a particular store -- more than any other form of advertising. That's up from 35.2 percent in 2007, when coupons were also the most influential form of promotion, above television and radio commercials, circulars and online ads.

Economic necessity has removed much of the stigma that many associated with coupons, said Matthew Tilley, co-chairman of the PMA's Coupon Council and marketing director for CMS, Inc., a Winston-Salem company that processes coupons for payment.

"We have to admit there is this sort of thing in people's heads that coupons are not cool to use," he said. "But from a consumer's point of view, that's quickly erased when you realize there's real money attached."

Deena Carpenter, 30, said she's noticed an increase in the number of coupons she's received in the last few months. She says she's paying more attention to the pitches and using them more, too.

"I have a wallet full of them," she said as she shopped at SouthPark on Friday afternoon. The Columbia resident, who works in corporate relocation, said she receives e-mail coupons from stores she frequents, as well as by mail and in print.

That afternoon, she said, she was hoping to use coupons for Banana Republic, Ann Taylor Loft, White House Black Market and Victoria's Secret. The best she'd seen all season was at Ann Taylor Loft, which with a $50 or higher purchase around Thanksgiving offered two cards for $25 off a purchase of $50 or more.

"I like a deal, so if I can find one, I'm happy," she said.

"It just gives you more money to spend on other stuff," said co-worker Dorothy Proveaux, who was shopping with her.

More coupons

When the economy is humming, coupon use tends to decline. In 1992, nearly 8 billion coupons were redeemed. In 2007, that figure was 2.6 billion out of 302 billion coupons distributed. But the decline has leveled off in recent years, according to the Promotion Marketing Association.

Statistics that would show a rise in coupon use aren't yet available. But shoppers and industry observers alike say they've at least seen more of them this season, especially from local merchants.

Online coupon sites have experienced a traffic boom, and retailers are also working on ways to send them to cell phones, said Nikki Baird, a managing partner at Retail Systems Research, a retail market intelligence firm.

The coupon proliferation is also showing up at cash registers. For instance, more sales are being driven by coupons this year at Belk, which has been running more coupons and offering deeper discounts with them this year, spokesman Steve Pernotto said.

Unlike other forms of advertising, such as sweepstakes or image-building television commercials, coupons offer an immediate, tangible incentive to shop -- a benefit for merchants looking to sell products quickly, said J.B. Steenkamp, a UNC Chapel Hill marketing professor.

"They are a reason to buy, because people think it's now or never," he said.

Stores can also use coupons to offer lower prices without altering their brand image, particularly higher-end merchants, Tilley said. But they need to be careful not to make the deals too complicated or create the false expectation that prices will always be that low, both of which could lead to a negative customer experience, the NRF's Gatti said.

Simplicity, but not coupons, has worked best at Monkee's of Lake Norman, a Davidson ladies' boutique, owner Sandy Bowers said. After speaking with other boutique owners and a consultant, Bowers decided to give coupons -- or, as she called them, certificates -- a try this season, placing them in ads and distributing at least 1,000 at local festivals and businesses.

Very few have returned to the store, she said, even a coupon for $25 off anything, including items below $25. She doesn't expect to use that type of promotion again in the new year.

"(The coupons) have not been nearly as impactful as doing a sale at a deeper discount than you would traditionally at this time of year. For us, that's 30 to 50 percent off," she said. "Customers want to know, 'How much is this? What's the percent off?' The more straightforward you can keep it, the better the response I've seen."

Alleviating price confusion is important, especially as there's been a large increase in the number of price changes retailers are making on a weekly basis, Baird noted.

Stick to the list

If you're feeling deluged by coupons now, get used to it, experts say.

"(Retailers) are desperate to generate sales, especially before the end of the year, because ... in January, the ax is going to fall," Steenkamp said.

But if you're thinking of clipping and redeeming, make sure you stick to your list and avoid buying more than you would have ordinarily just because you have a coupon in hand. In other words: Be smart, don't overspend and the rewards will add up.

"Shop around with coupons and it can save you hundreds of dollars on a monthly basis," Steenkamp said, "and that's worth it."