Canadians turning to coupons to cope with higher living costs

August 06, 2008
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Pressed with a sluggish economy and escalating living costs, Canadians are looking to the coupon for relief, according to survey results released today by North American target marketing leader ICOM Information & Communications (ICOM).

Of the 2,099 Canadian consumers who responded to a recent ICOM survey, 69 per cent said they are much more likely, or somewhat more likely, to use coupons during a recession. The breakdown was 42.4% much more likely and 26.4 per cent somewhat more likely. The robust 69 per cent bucks a trend, as overall coupon redemption rates have been on the decline in Canada in recent years, prompting many marketers to rethink their coupon strategies.

ICOM's nationwide survey of Canadian households was conducted in May. The online research was sent to 40,000 households in the ICOM Shopper's Voice database.

Broken down by age, 72 per cent of consumers in the 35-54 year-old age bracket said they are much more likely or somewhat more likely to use coupons in a recession. That compares to 67 per cent in the 55 years and above bracket and 63 per cent among those 18-34 years old.

Geographically, 70 per cent of Ontarians said they are much more likely or somewhat more likely to use coupons during hard economic times, versus 59 per cent of Quebecers. Those respondents describing their geographic location as Eastern Canada were 70 per cent much more likely or somewhat more likely to cash coupons in a recession, against 68 per cent of Westerners.

Income didn't make a significant difference to respondents, with 69 per cent of those earning less than $60,000 a year saying they are much more likely or somewhat more likely to use coupons in a sluggish economy, compared to 70 per cent for those earning more than $60,000.

Historically, coupons represent a key area in which manufacturers operating in economic hard times have not cut back. In the weakened economy of 2001, ICOM tracking showed a significant increase in the number of coupons redeemed.

"Savvy consumers can actually make money while others rework budgets during hard times," said Peter Meyers, ICOM vice president of marketing. "The typical household that wisely uses coupons can save 25 percent on their annual grocery bill - without cutting purchases. That pockets $2,600 a year based on the typical $200 a week grocery spend, which can significantly offset recent gas, living and food cost surges."

"Marketers are faced with a golden opportunity to engage consumers desperately looking for ways to save money. Blanket distribution tactics waste money and offend consumers. Why send cat litter coupons to households that have no pets? Brands that take the extra step of analyzing the audience will be rewarded for sending offers relevant to the consumer," Meyers said.

In the area of coupon technology, 58 per cent of consumers responding to the ICOM survey see their coupon use increasing if they could download a coupon from the Internet and have it automatically connected to an electronically swiped loyalty card.

Of that 58 per cent, 35 per cent said they are much more likely to use such a card and 23 per cent said somewhat more likely. Consumers using these paperless coupons receive the discount at the register without having to clip and carry. AOL, Kroger, General Mills and Procter & Gamble are involved in programs testing these high-tech coupons in the North American market.

No less than 62 per cent of consumers in the 18-34 age group said they are much more likely or somewhat more likely to use coupons if given access to this paperless technology. In the 35-54 age group, 61 per cent said they are much more likely or somewhat more likely. In the 55 and over bracket, 52 per cent said they are much more likely or somewhat more likely.

"This 'next frontier' in couponing has garnered recent consumer and media interest. Still in their infancy, online and digital coupons account for less than 1 per cent of the overall coupon market. While an overwhelming majority of consumers still prefer to receive offers in the mail, wise brands will keep this emerging trend on their radar screens," Meyers said.

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