Instant Discounts: Average Coupon Redemption Rates Demonstrate Viability
How many times have you made an online purchase that was influenced by redeeming digital coupons? Perhaps you received a promotional code after making a purchase at an online retailer. Or maybe you saw a special offer on a social media site you frequent, or in the form of an advertisement that you saw online. Whatever the case, you’d be quite surprised at the average coupon redemption rates.
As we have previously reported, over 25 million Americans are using mobile couponing apps each month, and that’s as of 2015. Made popular by services like Groupon, digital couponing has risen to new heights. Today, it’s smart to offer your customer a discount to earn their business. Most retailers simply view this method as an advertising cost that helps them win over loyal customers, who then are likelier to return for future visits, thus increasing retention rates.
Some retailers even use digital coupons in a cart abandonment email to help earn the business of a customer who bounced away before closing the sale. And yet others offer a discounted purchase price, via promotional code, within their retargeting campaigns to attempt to earn the business of prospective customers, who visited their site and left without making a purchase.
Join us as we take a closer look at this digital couponing phenomenon to see how and why the numbers actually stack up in favor of the online retailer.
How Many People Are Using Coupons?
In a Business 2 Community report that covered online coupons and their usage, it was found that, as of 2014, 16 billion digital coupons had been redeemed. By 2019, it’s estimated that over 31 billion will have been redeemed. Globally, think tanks estimate that at least 560 million people have used online coupons, a number that’s supposed to exceed 1 billion by 2019.
Overall, about 57%-59% of the U.S. is redeeming coupons online at the present. Around 45% of companies specifically use these coupons to market to consumers, too. The primary reasons why include: Building brand awareness; improving customer loyalty; appealing to consumer demand; and increasing the likelihood of a future visit and conversion.
The Smartphone Effect
Smartphones have changed everything in ecommerce. They provide a mobile-accessible form of shopping that accounts for about half of all online purchases at the present. With a variety of apps, online services and marketing campaigns as well as push campaigns, it’s easy to understand why the average coupon redemption rates are high on handsets, averaged at about 40% overall this year.
The most recent coupon redemption statistics find that:
- About 62% of smartphone users are likely to use an ecommerce coupon in the near future.
- Around 55% of smartphone users rely on their handsets to find coupons before making a purchase.
- Mobile coupons are expected to grow in usage by at least 80% this year alone, with about 40% of mobile shoppers already signed up for services that send them these coupons via their handset.
Emails & Digital Coupons
Emailing coupons is a smart way to earn new business or to get repeat business from existing customers in your mailing list. Studies have found that including coupons or promotional offers in your emails to customers offers a healthy return. Take a look at the graph below to find out why.
Creating Your Own Digital Coupons
As you can see, it’s smart business to offering digital coupons. But how can you go about making your own? Well it all depends on the sales channels that you are using. For example, WordPress powered sites have a lot of coupon plugins that you can use. If you are selling using Shopify, BigCommerce, Magento, PrestaShop, Volusion or others, you can usually find apps in the App Store that you can integrate (some are free and others charge a monthly premium) to offer these coupons.
That aside, there are also a variety of different online services that enable you to generate and track online coupons. Along the way, make sure you don’t overlook the power of social coupons, which have a proven track record for attracting customers and improving conversions. The basic logic is: If you know that by offering a simple discount to close a sale, it makes absolute sense to say “yes” to future profits.