Marketers especially in the CPG and Food and Beverage industry spend a considerable amount (28.15 billion) in digital coupons to increase their sales, along with increasing brand loyalty amongst customers.

Companies are finding it difficult to increase their chances of coupon redemption when compared to the number of coupons that are distributed every year. This whitepaper will help clients to make a decision on what type of vendors should be engaged with in order to increase the chances of redemption and thereby increase ROI.

Approach of Consumers, Retailers, Brands and Coupon Service Providers towards Digital Coupons

Consumers increasingly prefer digital coupons more mainly because they are easily accessible via different mobile channels like; apps, daily deal, group buying sites, social network etc. The increase in smartphone and tablet penetration amongst consumers is also leading to more usage of digital coupons. The consumers would be receiving coupons on all the products irrespective of their preferences for the brand/ product.

Even though brands are investing more on digital coupons every year through different channels, the digital coupon redemption is only close to 6% out of the total number of coupons downloaded. This makes digital coupons costlier than traditional ones.

Coupon service providers are adopting new technologies to make digital coupons more targeted or one-to-one basis. This would help the companies to increase the total number of coupons redeemed when compared to the total number of coupons distributed and thereby helping the clients to increase their ROI.

Digital Coupon Industry Outlook

Digital coupons accounted for less than 1% of the total coupons distributed for the year 2014. Although digital coupons account for a small share of the total coupon market, marketers’ focus on digital coupons are increasing due to the growing e-commerce and m-commerce coupled with the growth in social media.

The number of users who redeem coupons via mobile are expected to increase from 78.69 million to 104.11 million between 2014 and 2016. It is estimated that in 2014 only 36.5% of the marketers are offering mobile coupons. By 2016, it is expected that about 44.5% of the marketers would offer coupons via mobile.