With over 28 years’ experience in setting up and managing campaigns, we have supported a wide range of different scratchcard promotions including both physical and digital campaigns. They are ideal for boosting sales and provide many benefits such as the following: 

How cashback and coupons drive higher overall spend

In a climate of belt-tightening, what kinds of price promotions are delivering the best results for brands, while helping consumers to get more for their money too?

High inflation doesn’t just hit shoppers’ pockets. A cost-of-living crisis is a challenge for manufacturers, suppliers and retailers too.

MRM’s mix of promotional marketing services includes cashback, money-off coupons and on-pack promotions, but how do these compare with price discounts at the point of sale?

Let’s take a look at the state of shopping in 2024 and how the offer of money back later can be more persuasive than a direct discount on the shelf.

Are more people buying own-brand products?

First of all, some results from the Q1 2024 KPMG UK Consumer Pulse Survey[i], which found that British shoppers are using a variety of methods to control their budgets.

[i] https://kpmg.com/uk/en/home/media/press-releases/2024/04/half-of-uk-consumers-say-they-have-cut-non-essential-spend-so-far-in-2024.html

 

The figures show that in general, consumers are more likely to opt for a promotion, discount or loyalty programme than they are to reduce the number of items they buy.

For retailers, this presents an opportunity to provide shoppers with the perception of better value, while still generating revenues for the business.

What is an integrated price promotion?

When it comes to reducing the price of a product, retailers have a number of options available to them. These fall generally into two categories:

Both can be beneficial in different ways, but new research suggests that non-integrated price promotions can lead to more sales of higher-priced products – so how does that work?

How do consumers compare prices in-store?

It all comes down to the way shoppers perceive price differences when comparing premium and own-brand products in-store (or any two products with a difference in price).

For example, consider two products priced at £10 and £15, and included in a price promotion which offers £5 off.

Integrated Price Promotion

If the discount is applied immediately to the shelf price, the two products are sold at £5 and £10, making the higher-priced item 100% more expensive than the cheaper product.

Non-Integrated Price Promotion

If the £5 comes in the form of a coupon or cashback to redeem later, the two products are sold at £10 and £15, making the higher-priced item 50% more expensive than the cheaper product.

A study in April 2024’s Journal of Consumer Research suggests that shoppers perceive these percentage differences when making their purchase selection – and may be more likely to choose the premium product when the price reduction is not integrated upfront.

How effective are price promotions?

The research, Final Price Neglect in Multi-Product Promotions: How Non-Integrated Price Reductions Promote Higher-Priced Products[i], includes a study of 601 UK consumers who were asked to choose between two USB flash drives priced at £22.99 and £40.99, or to choose neither.

[i] https://academic.oup.com/jcr/article/50/6/1097/7220485

According to the study:

If only the higher-priced USB drive was offered, there was no significant difference between integrated vs non-integrated promotions, indicating that the availability of the budget option is an important factor in determining the outcome.

Do smaller discounts work?

Yes – the researchers looked at the size of the discount offered and found that while deep discounting is more effective at increasing buying intent, smaller discounts still have an effect.

Do percentage discounts work too?

Surprisingly, yes. You might imagine that a percentage discount – as it’s based on a proportion of the original price – would overcome the perceived difference in value. In fact, the researchers found that percentage discounts have a smaller effect, but they do still work.

How do price promotions boost sales overall?

In another part of their study, the researchers looked at the overall impact of integrated and non-integrated price promotions on buying intent, and found that both help to raise the number of sales.

They did this by offering USB drives with an integrated price discount, a non-integrated money-off coupon, or no promotion at all.

Again, the non-integrated promotion was more effective at boosting sales of the higher-priced flash drive:

“Compared to integrated promotions, non-integrated promotions can better unleash the potential of multi-product price reductions in terms of converting the increase in consumers’ purchase incidence into their choice of higher-priced products,” the researchers concluded.

What does this mean for retailers?

The study could have a number of implications for retailers, especially those who stock brand-name, budget and own-brand products side-by-side on the same shelf.

Offering price discounts on the shelf ticket can help to increase sales, but you could be shifting shoppers’ attention towards the cheaper product in the process.

Alternatives like coupons, vouchers and redeemable cashback can avoid this unwanted effect, ensuring that the promotion encourages more people to buy your higher-priced products.

On top of that, there is the potential for cashback and coupons to go unclaimed – ultimately allowing you to sell premium products at full price without ever needing to pay the discount.

How to fulfil price promotions

MRM can help with the planning and fulfilment of price promotions, with a range of promotional marketing services to help you offer your customers the discounts that work best for you.

Our couponing services include money-off coupons and digital coupons, with clearing, processing and settlement all provided as part of our robust process.

We’re currently running a national door drop activity for one of our clients – another traditional way of getting coupons into customers hands. And with Sainsbury’s reporting that more of its customers are returning to shop instore rather than online, door dropping coupons is an effective way of encouraging store traffic ahead of price discounting at the point of purchase.

MRM also offers:

All of our digital marketing services are fully brand-integrated, including loyalty scheme microsites and cashback redemption pages, so at every stage your brand perception is enhanced further.

Get in touch with MRM today

To find out more about how our promotional marketing and couponing services can help you offer value to your customers while increasing your overall revenues, get in touch with MRM today.

We welcome enquiries about off-the-shelf and bespoke brand marketing campaigns, and we’re always happy to discuss our services with potential future clients.