Summary
- Retail sales and foot traffic took a nosedive in December as interest rates remained high and inflationary pressures continued. But the news isn’t all bad.
- People are still willing to spend — they just want deals. With the right coupon strategy, retailers can serve them up and boost their revenue.
Spending and foot traffic may be down, but with the right omnichannel coupon strategy, retailers can bring them up.
The latest spending data is in. And it isn’t great. According to the U.S. Census Bureau, retail sales fell 1.1% in December — the fourth monthly decline in a row, and the biggest in a year. In addition to spending, foot traffic was down, too.
It’s not surprising. Inflation and fears of a recession have people concerned, and they’re slowing their spending. But with a strategic, omnichannel coupon strategy, retailers can get them to pick up the pace.
Our research shows that approximately half of shoppers are cautiously optimistic about the year ahead.1 They will spend — they’ll just be more prudent about what they purchase. And they’ll be looking for deals.
This is where coupons come into play. Nearly two-thirds of consumers Vericast surveyed said they want more coupons, discounts or deals to offset the price increases they’re seeing on everything from groceries and clothing to electronics and dining out. And half will base their shopping decisions on their ability to secure those deals.2
Herein lies an opportunity.
Make New Friends While Keeping the Old
Through well-planned and executed coupon programs, retailers can serve up deals that not only keep existing customers shopping, but bring new ones in the door, and effectively stem the tide of declining sales and foot traffic.
As uncovered by the Vericast 2022 Retail TrendWatch report, more than half of respondents (55%) are willing to try a new retailer or provider when purchasing a product or service for their home. And fair prices (55%) and quality of goods (57%) will be top factors in their decision.3
Seize the Moment
Timing is everything. When it comes to promotions, 50% of shoppers noted they are more likely to purchase from a retailer that reaches out at the right time. And every customer is unique. Shoppers who visited six months ago, for instance, may need a bigger push to return than those who have shopped in recent weeks.4
With the right marketing technology partner, retailers can gain visibility into market and customer data and effectively mine it to develop targeted offers that spark action.
Cash In
Coupons will bring customers in the door. But simply offering them isn’t enough. To cash in, retailers need to ensure consumers use them. This means striking the right balance between national brands and private label offerings.
Many consumers are loyal to brands and rely on manufacturer coupons to keep their spending in check. In recent years, several retailers have replaced the national brands on their shelves with private label goods. In doing so, they not only reduced customer choice, but limited the coupons and promotions their customers could take advantage of. Some of these retailers paid a hefty price. As a result, one major home furnishing retailer in the U.S. saw manufacturer coupon redemption decline 85% from 2016 to 2022 … and their sales along with it.5
Help Consumers, Help You
In today’s economy, few things are certain, except for this: Consumers want to save money and retailers want to grow. Believe it or not, these goals are not mutually exclusive. In rethinking traditional coupon strategies and taking a data-driven, omnichannel approach, innovative retailers can deliver both.
To learn more about how we’re thinking about things (as you consider your coupon approach), check out some of our other coupon blogs.
