Coupon industry tapping digital to lure consumers

In the heart of the recession, we became a coupon-crazy country, clipping, printing and downloading billions of coupons a year.

That's still true, but the coupon industry is rapidly evolving, attracting younger users and more men, as well as zapping out more digital and mobile versions of the classic cents-off paper coupons.

It's a trend Riverbank resident Amanda Rodrigues is proud to be part of. The 26-year-old kindergarten teacher started clipping coupons in the past year. Since then, she's become an expert and has converted her 55-year-old father to the cult of couponing.

"When I find good coupons and deals, it feels like I won the lottery," Rodrigues said. "I am pretty much one of the only one of my friends who does it. But my friends are intrigued by what I do and the savings."

Couponing has become so popular in the region that the Sacramento metropolitan area was recently ranked among the country's Top 25 Most Frugal Cities, based on its digital coupon usage.

"Years ago, coupons were mostly for grocery items, like cereal. Now it's almost everything you're buying, from clothes to restaurants to drugstores," said Jeanette Pavini, household savings expert with Bay Area-based Coupons.com, which tallied the most-frugal-cities list.

Pavini said the Sacramento area's first appearance on the list can be tied to several possible factors: California's relatively high unemployment rate, openings of coupon-centric Wal-Mart stores and younger couponers plucking deals online or with their mobile phones.

Last year, the number of manufacturers' coupons issued — for everything from diapers to dog food — was a staggering 305 billion. That's a whole lot of coupons to be clipped, printed or downloaded.

The numbers don't surprise Modesto resident Sonja Radinovich. The 62-year-old said her coupon usage has increased recently. She looks up deals online and in the newspaper, and when she shops has coupons for at least half, if not 75 percent, of the items she buys.

"It's the economy, that's all it is. Because of the economy, people are looking for coupons," she said. "I don't like putting out money if I can save."

She figures she saves up to $25 a month by using coupons.

Yet the number of coupons cashed in by U.S. consumers in 2012 slipped 17 percent compared with the previous year, according to NCH Marketing Services in Deerfield, Ill., which tracks annual coupon usage.

It's all part of subtle shifts in couponing, says Charlie Brown, NCH marketing vice president.

A changing game

Paper coupons clipped from Sunday papers still dominate, but digital coupons on websites and mobile phones, as well as retailers' loyalty cards, are attracting a younger — and increasingly male — audience. At the same time, manufacturers are offering more nonfood coupons, which may affect demand.

Modesto resident Joanne Kendall is among those joining the digital coupon revolution. She visits Coupons.com and other sites when making her shopping list. She also started using mobile coupon apps and sites on her smart phone.

"I am not that computer-friendly, but now that I have a smart phone, it's so easy to look things up," said the 53-year-old. "I've noticed a lot more people using coupons. I think it's the economy, but also there's a lot more selection out there of kinds of coupons."

Despite the recent dip, coupon usage remains far higher than what it was before the recession, according to NCH data.

"There's a large segment of the population that's made it part of their shopping habit," said Brown. "Overall, the consumer has maintained a frugal mind-set that was established during the recent economic downturn."

Also factoring into the mix are online "daily deal" sites, such as Groupon, Living Social and dealsaver, which have sprouted — and withered — at a fast pace. (Dealsaver is owned by the McClatchy Co., The Modesto Bee's parent company.) Last year, more than 140 daily deal sites popped up; at the same time, 560 globally shut down, according to Daily Deal Media, which tracks the industry.

Boyan Josic, Daily Deal Media's founder and CEO, said the crowded daily-deal marketplace has contributed to a bit of "coupon fatigue," especially when companies that are bought, sold or merged sell their subscriber lists. Suddenly, a consumer who signed up for a local deal site is bombarded with unsolicited email offers from other firms.

Nevertheless, Josic and others say digital couponing, especially via smart phones and mobile devices, is making inroads.

Last year, about 90 percent of the 305 billion coupons issued were in print, either in newspaper inserts or stand-alone mailers. While digital made up less than 1 percent of all those coupons, it accounted for more than 6 percent of the 2.9 billion that were cashed in, according to NCH Marketing.

Experts say we'll be seeing more digital coupons, including those loaded directly onto store loyalty cards such as those offered by Raley's and Safeway. Other retailers are experimenting with coupon offers that pop up on smart phones as you pass by.

Decline follows shift in offers

As for the 17 percent year-over-year decline in coupon use in 2012, NCH's Brown attributes it to a change in the type of coupons offered by manufacturers. Rather than offering 75 cents off pantry essentials such as pasta or breakfast cereal, more companies last year were busily issuing coupons for nonfood items such as health and personal care products.

And coming out of the recession, there was pent-up eagerness among manufacturers to tout new products via coupons.

But consumers weren't buying. In NCH's annual survey, most of the 14.5 percent who reported using fewer coupons in 2012 said it was because they couldn't find coupons for the products they wanted or weren't tempted by unfamiliar new ones.

But for coupon experts such as Rodrigues, the thrill of the hunt and savings doesn't seem to be waning. She said she was inspired to start after watching the TLC reality series "Extreme Couponing." Last year, Rodrigues attended a Modesto Bee-sponsored couponing workshop to learn the tricks of the trade.

She gets five Sunday newspapers, collects coupon circulars such as Red Plum and prints online coupons. She uses the site Grocerysmart.net to find deals, and then stores her bounty in a file crate. She said she shops about every two weeks, taking with her a resealable plastic bag filled with more than 20 coupons — and often many more.

"When I started out, I was only working part time, so I wanted to save money. Now, each time I go, I save 40 to 60 percent off my bill. I have saved up to 90 percent before," she said. "This is a big change for me because I never used to use coupons. But I am definitely going to keep doing it."

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