New research on the importance of discount codes for retailers
If any evidence is required that voucher codes are mainstream currency, then look no further than the success story of Mark Pearson founder of My Voucher Codes. Having identified US coupon sites as a lucrative business model and realised that no-one was replicating it in the UK, he launched his business with a £300 website and eight years later, sold the business for over £60m.
Whilst I’m sure good management is partly behind the success of this and its competitors, contrary to popular belief, it’s also the case that recession-generation businesses can often perform well if they capitalise on the mood of the people, as is the case here.
One the whole, the financial pain felt by many is lifting but our love of voucher codes is not diminishing and whilst their use was previously a clandestine operation, we’re now much louder and prouder about our discounts.
Consumer research undertaken amongst 2,000 UK adults (via ICM research) for digital marketing agency,
Browser Media shows that four out of five UK adults have saved money by applying at least one voucher within the past year (and some ‘addicts’ claims to have used 50+). Women are more likely to use discount vouchers and codes than men (18 per year vs. 15), yet men believe they’re more savvy than women when it comes to getting a good deal online (44% vs 40%).
Returning to the theme of our willingness and openness is using these codes, 41% of people said that voucher codes have become much more socially acceptable than they were previously.
More information about the statistical findings of the research are available on the Browser Media blog but for retailers thinking about adopting a voucher codes strategy, here is some interesting food for thought:
- 28% of people say they’ll always compare prices online, even if they’re shopping in store, so retailers need to ensure they have a consistent pricing strategy so that their customers know what to expect when purchasing using different channels.
- 13% of people said they dislike checkout processes that only allow the voucher code to be applied at the very end - consumers are more confident if the discount is clearly visibly whilst still on the product/shopping pages, prior to checkout.
- Just over one in ten (11%) are more likely to use a discount code if the retailer makes it memorable using real words or dates - random letters and numbers were less likely to be remembered or used.
Offer a discount code box on your site and you will, I repeat, you will, see more checkout abandonment as customers start hunting down a code. However you may also see a greater value and volume of sales, depending on the type of offers you make available.
Unfortunately, there are no short cuts when it comes to creating a discount voucher strategy - testing and measuring on a regular basis will help you assess the success of offers and inform future decisions. What is clear is that voucher codes are here to stay and all online retailers should consider whether this style of merchandising could be lucrative for their business.