Online Coupon Strategy: 21 Coupon Statistics to Know
by Andrew Reed, on Jun 29, 2021 9:00:00 AM
Coupon codes have long been a marketing staple and with COVID fueling an increase in online shopping through 2020, offering discount codes to buyers remains one the most effective ways of driving new and repeat purchases on your ecommerce website.
What impact do coupons really have on ecommerce store performance?
Although promotions are a powerful instrument for increasing sales and margins, they canare also drive profits down and cause problems with marketing attribution if not difficult to use effectively.
To understand this better, we gathered some of the most interesting coupon code statistics from the past year.
More than 90% of shoppers search for and use coupon codes while shopping online (valassis)
Customers love discounts, and surveys show that they continue to go out of their way to find ways to get the cheapest price they can.
This includes scouring the web for discount codes or installing apps like Honey or Capital One Shopping (which have over 17 million combined users) to help them save on their online purchases.
68% of consumers believe that digital coupons generate loyalty (valassis)
This has been a long-standing theory fueling the use of discount codes that is still valid in 2021.
Rewarding customers that shop at your business with discounts is an effective way of showing your appreciation while also encouraging repeat business.
But as an online retailer, the trouble comes when customers become accustomed to receiving discounts and therefore only convert when they are offered an online coupon. This can negatively impact your revenue because not only are you losing money due to the discount you are offering—you also may be paying an affiliate commission at the same time.
If you find you have to continuously offer a discount to get customers to convert, consider slightly lowering your prices across the board instead to entice shoppers while cutting out the middleman.
38% of consumers bought more than they would have because of a coupon or discount. (CreditDonkey)
Offering discounts can not only entice customers to make a purchase, but because of the savings, many customers may spend more because they believe they are getting a better deal.
This is another typical coupon strategy that continues to be supported by customer data. If you are trying to grow your social media, your newsletter readership, download your app, or lock customers into a loyalty program, offering them a small discount gives them the push they need to sign up.
81% of consumers would take additional action, such as enrolling in a loyalty program, to redeem a rebate or coupon. (CreditDonkey)
69% feel like a smarter shopper when they use coupons/discount codes (valassis)
Some subliminal positive reinforcement can go a long way when marketing your business.
Having coupon codes and allowing shoppers to find their way to great deals will greatly increase the likelihood of a purchase.
Interestingly enough, a study by Coupons.com and Dr. Paul J. Zak, Professor of Neuroeconomics at Claremont Graduate University found that coupon recipients were happier and more relaxed. In fact, the experiment participants who received a $10 coupon experienced a 38% increase in oxytocin levels and were 11% happier than participants who didn’t receive any coupon.
60% of coupons lead customers to try new products (valassis)
Many shoppers can be wary when it comes to trying new things, but if there is a discounted deal that is too hard to turn down, they will likely convert with far less caution.
This is why offering codes for new customers has been such a historically successful strategy for retail marketers.
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89% of consumers say the price is the main factor that affects their purchasing decisions (valassis)
This statistic is useful in two ways. First of all, it supports your coupon marketing efforts. Offering up discounts to customers will make them more likely to convert.
Secondly, it shows that if you find you are struggling to bring in customers without offering discounts, marginal price drops could be your solution.
Honey users “saved” roughly $1.6 billion, $830 in a single purchase, shared over 900,000 gift cards (Honey)
The popular coupon app that automatically injects coupons for its users was able to save its shoppers around 1.6 billion last year, with the highest single saving being $830, while also sharing over 900,000 gift cards.
This might seem like a marketing super affiliate, but in reality these numbers are quite alarming.
Honey claims to drive sales for online retailers, but because the coupons aren’t found until the end of the purchasing journey, it is not clear what impact it really has on new customer acquisition or cart abandonment.
On top of this, many of the gift card and coupon codes shared by extensions like Honey are meant for specific customers, or are limited-use, so when these codes are scraped and handed out indiscriminately it will wreak havoc on your marketing strategy and your attribution.
As a retailer, if you want a look into how unauthorized coupon injection may be affecting your business, check out the cleanCART free trial here.
Honey & CapitalOne Shopping are each adding an average of 1M new users per month
The success of these coupon extensions continues to grow at a blistering speed. This means more and more scraping and sharing of coupon codes, cutting into your revenue, and damaging your customer loyalty.
The coupon extension industry continues to grow, with new users and products lining up every day. It's hard to say what this will do to the online retail industry, but with the impact these apps are currently having on retailers margins, we predict there will be increasing demand on the part of retailers for more granular control over how these apps function on their websites.
By 2022 coupon extension penetration is expected to reach 110 Million users
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While there are a number of coupon extension apps (CapitalOne Shopping, Rakuten, and Piggy to name a few), Honey continues to hold the large majority of the market share.
Honey currently accounts for 55% of coupon extension usage
They also have built the most lucrative business model with their affiliate options. By encouraging retailers to join their affiliate program in order to gain greater control over how their coupons are shared, Honey not only cuts into your margins by offering unearned discounts to shoppers, but also by charging you an affiliate fee.
If you are struggling to keep your codes out of honey’s app, consider a cleanCART free trial to see how it affects your margins.
Capturing user data on your website is crucial to a successful marketing campaign. Having a way to reach shoppers and encourage them to return to your website after either making a conversion or abandoning their cart remains an effective way to maintain and expand your revenue.
Emails with coupon offers increase sales revenue by 48% per email. (valassis)
20%-50% of promotions result in no or a negative impact on sales. (Boston Consulting Group)
A mismanaged coupon campaign can not only fail to bring in new customers and sales, but if you go too far, you may end up hurting your brand’s reputation and pushing customers away.
Customers want quality products, and discounts often singal to shoppers that the product may be cheaply made or not reliable.
Before using coupons in your marketing mix, it’s important to understand who your target audiences is, and how you want them to perceive your brand.
20%-30% of these promotions dilute margins so much that they don’t offset the promotion expenses. (Boston Consulting Group)
The whole point of coupons is to serve as a loss leader for future profits. If you aren’t properly managing your promotion campaign, it's possible that the boost in sales you may see won’t actually make up for the discounts you are offering.
94.83% of shoppers who purchase via promotions are single interactions. (CM Commerce)
This means only 5% of the new customers that your promotions attract will return for repeat purchases. So you have to be careful when planning promotions, because if you’re using coupons or discounts as a loss leader, they may end up causing you to lose money if you don’t turn those new customers into repeat purchasers.
55% of consumers said the dominant loyalty factor was product quality while 25% said great sales/deals (Yotpo)
It's important to remember that most customers are making purchases because they are excited about your product, and not because they are searching for a good deal.
Keep this in mind when trying to retarget customers so you don’t end up offering them another discount on your product when they would have converted at full price.
Ecommerce, and now m-commerce (mobile commerce), has seen huge spikes in part due to the pandemic, but this only bolstered a natural trend.
Digital coupon redemptions are projected to rise by 94% by 2022 and 80% of coupons are expected to be redeemed on a mobile device.(Juniper Research)
Having your discount promotions run through social media apps, or on mobile ads, is an increasingly effective way to reach new customers.
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35% of consumers who have redeemed an exclusive offer did so when they knew they really didn’t qualify (Kelton)
This is called coupon fraud and it can wreak havoc on your attribution reporting. If too many of your coupons are wrongly shared, it’s likely you won't be able to properly retarget your customers or gain a fair understanding of which campaigns worked and which didn’t.
Make sure you have tight criteria so that users can’t share discount codes, or create limited use coupons so that you don't over extend your reach.
These stats can help you understand what kind of promotions are experiencing the most redemption fraud. If you’re using information gathered through forms to verify your buyers’ information, be aware that bargain hunters may use fake identifiers to access your promotion codes.
When customers wrongfully redeem an exclusive offer: 49% used a code/link to an exclusive offer that a friend forwarded, 25% used someone else’s information that would apply, 23% used someone else’s date of birth, 21% used someone else’s name, 20% said they belonged to an organization they didn’t, 18% gave a false university, and 17% said they were employed somewhere they were not. (Kelton)
80% of shoppers lose trust in the brand after hearing it was allowing customers to redeem exclusive offers they didn’t qualify for. (Kelton)
Your brand reputation is a key driver of customer loyalty. Maintaining tight control over your discount strategy is critical to protecting your brand reputation. When you generate limited use codes, you need to be able to ensure those codes are going only to the audience for whom they are intended, and not getting picked up by coupon extensions and distributed to a wider audience that may not qualify for the discount, thus creating friction and harming their perception of your brand.
Treating your customers well will go a long way when it comes to enticing repeat business. If you are having trouble maintaining repeat customers, consider investing time into developing a better relationship with them by offering great customer service rather than using discounts to bring them back.
Consumers who are eligible for exclusive offers are just as likely to shop with a brand because of the offer as they would be for a brand’s customer service (89% vs. 92%) (Kelton)
This way you can avoid damaging your margins while also improving customer satisfaction and loyalty.
Risks and Rewards of Coupon Codes
Coupons have long been an integral part of retail marketing, and are easy to implement while offering many different ways of bringing in customers.
But it’s important to avoid “training” your customers to expect discounts every time they make a purchase. This will end up hurting you in the long run as you take a hit on your margins as a result of discounts, on top of what you’re already spending on your marketing expenses.
On top of this, coupon extensions like Honey and Capital One Shopping can erode your revenue by oversharing limited use coupon codes. This can not only wreak havoc on your attribution models, but you may also end up over paying affiliates as Honey scrapes their codes from your site and shares them across their users.
Marketing budgets are tight and the costs to acquire customers can make or break your online store, so having informative and reliable tools to maintain your strategy is invaluable.
If you believe you are losing revenue to over active coupon codes, you can start your cleanCART trial here and begin blocking unwanted coupon injections.