The Comeback Kid

Grocery shoppers have a new mindset: They’re siphoning money away from milk and eggs and putting it in the gas tank.

Some are listening to consumerists and staying out of traditional supermarkets. Where are they shopping? In club stores (where they can buy in bulk), drugstores (where milk is less expensive), and even on Amazon.com. At that site a search on the word “grocery” turned up 85,744 results, with many of the items discounted and shipped free.

Even when people do make it to the grocery store, they want one thing: To save money. And that means they want coupons.

Shoppers can be grouped into two basic categories in times like these. Some will switch brands in a second if a competitor’s price is lower, or if a promotion steers them in that direction. Others will stand by trusted, well-known brands no matter what.

It’s possible for coupon issuers to satisfy both groups.

Take bargain hunters. As Amy Johannes reports (see page 28), 63% of coupon users say that discounted offers give them an incentive to try new products. At the same time, 67% indicate they’re more likely to use coupons during a recession.

What’s more, research from CMS suggests that coupon use has stabilized. Redemption was flat last year compared with 2006, the first time since 1992 that there hasn’t been a decline.

This is great news for companies seeking new customers. But there’s a danger that loyalists will become disloyal.

Want to retain customers? Loyalty clubs, the kind that reward consumers with coupons and other discounts, work well in a downturn. But you also have to pay attention to distribution.

There are plenty of ways to get coupons into peoples’ hands. For one, research shows that consumers are going online in ever-increasing numbers to find and download offers.

You also can include coupons with cash-register receipts. It’s an ideal way to instantly reward loyal customers.

But first tune up your data-mining and marketing machines. Many stores are basing coupon distribution on transaction data, but only up to a point. And they may be missing an opportunity.

In my experience, the coupons I get are only somewhat related to the products I’ve purchased. But they rarely reflect the exact items (even when I’ve bought them numerous times).

It’s time to include tailored coupons with those receipts. Rest assured they’ll be appreciated — and redeemed.