My eye was caught recently by a piece of research carried out by Mintel and highlighted by them on Twitter here.
I’m assuming that this is US research due to the use of “coupons” rather than the UK “voucher” or “discount code” but I think that the learnings are valid over here too.
The beauty of the internet is the ease of having almost infinite information at your disposal. In the “coupon” space, this means that a consumer has the ability to search for and find a huge assortment of coupons for an incredibly wide range of merchants. This is exacerbated by the fact that there exist many coupon directories, where a consumer can find hundreds, even thousands, of codes amalgamated in one place for their use.
Compare this to offline coupons. The consumers interactions with a coupon is limited to those displayed in publications that they have purchased or been given. To achieve the same reach as is available online, a retailer would be shelling out a considerable amount of advertising spend.
Yet the research shows that consumers are more likely to use coupons from newspapers than they are online ones. There need to be some further questions uncovered about the survey; more people shop offline than online so they’re more likely to use offline vouchers. However, we must make the assumption that Mintel have built this into their rationale.
So if consumers are more likely to use offline coupons than online, why is this? I would put forward the suggestion that it is due to the trust factor. If a consumer receives their coupon in a newspaper, they assume that it is a valid one. They understand that the merchant has paid to secure that advertising space and accept that the merchant is offering them a discount in order to secure their business.
When uncovering a code online, they do not have the same understanding and trust. They question why someone would altruistically offer them a way of saving money. They do not understand the mechanic that exists and why the code is there in the first place. Perhaps they have had a bad experience previously where the coupon offered was not valid and have become frustrated and disillusioned with the process, thinking it’s too much trouble to search around for something that might not even be there.
So what does this mean for the affiliate industry? I think that we are seeing the results of this shift in consumer behaviour already. The voucher code regulations released by the IABs Afiliate Council this year go some way to restricting this perception. All codes must be outlined before taking the consumer to the merchant site and all expired codes must be clearly marked.
But also, we are seeing the larger and more ambitious voucher code directories attempt to establish themselves as brands in their own right. For these sites the days of just stuffing as many codes as possible on to a site are over. The focus is now on providing a valuable consumer experience, providing the customer with what they want and encouraging them to return. In addition we are seeing a few of the big UK voucher sites involve themselves in offline promotions and substantial PR activity, again to enhance their position of credibility.
Over the past year or so, we have seen a lot of brands pull out of the space and refuse to work with voucher code sites. I think going forward that we will start seeing brands only work with a small number of voucher/coupon affiliates. Those that have established a strong consumer facing brand and can ensure high levels of visibility to the brand whilst working closely with the brand to enhance the customers shopping experience.
