Cashback and Coupons find favour with Consumers
Cashback and coupons are helping UK consumers to earn bragging rights as the cost of living crisis rumbles on.
Earlier this year, we reported how the chance to accumulate cashback rewards was one of the key driving forces behind double-digit uptake of loyalty programmes.
Now new research shows that Brits who bag a bargain – whether that’s via cashback, discounts or competitive pricing – are likely to spread the word among their friends and family.
A survey commissioned by TopCashback[1] found that more than a third of UK adults (37%) tell their loved ones about bargains on the day of purchase, generating immediate word of mouth for the brand or retailer.
This is in spite of the fact that the majority (55%) will not boast about their own achievements, such as getting promoted at work.
In fact, British adults are twice as likely to brag about bargains as they are about a job promotion – and 28% will only discuss money when talking about finding a great deal.
Put the buzz before the bargain
It’s important to note that in the survey, people were asked whether they mention big savings to their friends or family members on the day of making their purchase.
In many cases, this means the increase in brand awareness may come before the customer redeems their discount – for example, when claiming cashback on a big-ticket item like a television or washing machine.
This tallies with the types of products people like to boast about. The survey found fashion at the top of the list for 75% of people, but in second place were brown goods and gadgets like games consoles and computers, which 69% of people would brag about getting a good deal on.
According to TopCashback: “A phenomenal discount on something expensive is the thing most likely to get people itching to tell others about the savings. Earning significant cashback and making big savings were the next top reasons for showing off.”
With household finances under pressure, these kinds of promotions could be the differentiating factor that helps to convince consumers to buy big-ticket items like fridges, washing machines and other white and brown goods.
Don’t underestimate the impact of bargains
Special offers are not just a good way to generate positive word of mouth; they can also win back customers lost to other brands.
A survey of 21,700 consumers in the UK, USA and France[2] found that over 40% would consider returning to a brand if they improved the quality of their product or their customer service. But an even higher percentage – around 50% – would be attracted back by coupon codes and discount deals.
Sometimes the promotion itself is as appealing as the financial saving. A YouGov survey[3] found that 17% of British people find promotions exciting and 10% enjoy the experience of taking part.
We’ve all experienced the rush of getting something we really wanted at a price that felt too good to be true – and rushing home to tell our family about our big win. It seems that excitement has international appeal.
How deals are driving in-person purchases
It’s not all about ecommerce: physical coupons continue to play an important role in encouraging purchases in bricks-and-mortar stores.
A survey by Bauer Media Outdoor[4] found that special offers are the biggest influence on product selection for in-store shoppers faced with a choice:
- 65% choose a product on offer
- 37% choose the cheapest option
- 27% choose a recognised brand
Promotions like physical coupons and cashback vouchers can also influence impulse purchases, giving consumers the perceived extra value they need to pick up a product they did not previously plan to buy.
The Bauer Media Outdoor survey found that the majority of UK consumers buy in-store on impulse at least several times every month:
- 32% a few times per month
- 18% a few times per week
- 11% every time they shop
At a time when consumers are focused on their spending, small incentives like coupons and redeemable cashback vouchers can be a powerful way to attract shoppers away from their familiar brand, without losing market share to budget alternatives.
Coupons keep up with Gen Z spending power
We recently reported on the types of promotions that appeal to each generation, noting that Gen Z and Gen Y (also known as Millennials) are both attracted by digital coupons e.g. online or on their smartphone.
As population growth slows, it is unlikely that future generations will surpass Gen Z, leading to predictions that they will be “the largest, wealthiest and highest-spending generation in history”.[7]
Millennials (born in 1981-965) will be aged 34-49 by 2030, accounting for much of the remainder of the working-age and parenting population. Together, they and Gen Z are a crucial source of revenue for the years ahead.
Coupons and cashback are valuable levers to access consumer spending across these age groups. A survey of over 3,000 UK consumers[8] found that:
- 45% of Gen Z favour coupons
- 51% of Millennials favour coupons
- 51% of Millennials favour cashback
The question asked was “Which type of loyalty or rewards programmes offered by retailers do you prefer?” and respondents were allowed to select multiple answers.
Our Far From Redemption report reflects these findings. In writing the report, we learned that 83% of consumers change their shopping behaviours due to coupons. Nearly two fifths (39%) buy sooner than planned due to coupons, and a similar proportion (38%) buy more than planned when they have a coupon to use.
Again, this lends itself well to the sale of brown and white goods, where even a small percentage of cashback can equate to a persuasive sum of money – and digital coupons in particular are a good way to drive purchases of products that are often ordered online for home delivery.
How MRM can help
Our Insights help us to understand the trends that are driving consumer decision-making in the current economy, as well as to look ahead to the next five years and beyond. We share this expertise with our clients to help you generate maximum profits from your promotions.
We work across physical and digital campaigns, including web coupons and digital coupons, on-pack promotions, cashback and loyalty programmes. Our campaigns drive sales, generate revenues and ultimately improve profitability for manufacturers and retailers of all kinds of household goods.
To find out more about the work we do, or to schedule an initial consultation about how we can help you, contact MRM today.
[1] https://www.topcashback.co.uk/guides/brits-more-likely-to-boast-about-bargains-than-promotions/
[3] https://yougov.co.uk/consumer/articles/36345-cut-price-consumers-how-global-customers-prefer-th
[5] https://www.pewresearch.org/short-reads/2019/01/17/where-millennials-end-and-generation-z-begins/
[7] https://www.statista.com/chart/33296/estimated-consumer-class-spending-by-region-generation/
[8] https://www.statista.com/statistics/1534863/loyalty-and-rewards-preferences-by-generation-uk/