|Kroger has tried to prevent deal-chasing consumers from decamping to rivals by offering coupons as part of its store loyalty programs. (Tom Uhlman/Bloomberg News)|
Shoppers forgoing loyalty for deals
As coupon use grows, stores aim to keep customers
NEW YORK - Extreme couponing, a consumer trend spurred on by the reality TV series of the same name, may make deal-chasing shoppers less loyal to retailers.
In the first half of this year, consumers redeemed 1.75 billion coupons for a savings of $2 billion, according to NCH Marketing Services. That’s an 18 percent increase from the same period in 2009, when packaged-goods companies began stepping up discounts to spur demand, the Deerfield, Ill.-based firm said.
Many consumers are taking their cues from blogs, websites, and “Extreme Couponing,’’ which features regular folks sharing their couponing exploits and started its second season Wednesday night.
“The main concern to manufacturers and retailers is that they are going to essentially throw away money to one-time buyers and not get a return on that,’’ said Debra Miller Arbesman, a senior associate at Compete Pulse, a Boston-based marketing firm. “They want to find ways to keep customers loyal so they aren’t wasting their time.’’
Packaged-goods companies and retailers typically hand out more coupons during hard times. Last year, businesses issued a record $332 billion worth, according to NCH Marketing Services.
The deals come in all shapes and sizes. Staples is giving away a $20 Visa gift card to customers who buy two Hewlett-Packard printer cartridges. Kroger is offering Tyson chicken for 99 cents a pound and $3 off Schick razors. Shoppers who buy any PC, Macintosh, or tablet computer at Best Buy get a year’s worth of Geek Squad tech support for $99.99.
There is one big difference this time around, though. Coupon aggregation sites such as shopathome.com and Groupon have proliferated, making it easier for consumers to find and compare deals on everything from spaghetti sauce to bridesmaid’s dresses. The debut of the “Extreme Couponing’’ series this year on the TLC cable channel helped energize the bargain-hunting fervor.
April Blum, a 38-year-old mother of eight from Erie, Pa., who appeared on the show’s second season premiere, said she has saved $50,000 since she began hunting deals in February 2009.
“My husband is a fire-safety officer and we were struggling to make ends meet,’’ Blum said in a telephone interview. “Then I just started stockpiling stuff and saw how easy it could be.’’
Since the “Extreme Couponing’’ debut, traffic to shopathome.com has more than doubled to 15 million visits a month, according to founder Marc Braunstein.
“The show created an awareness about coupons and made people see that, with a little effort, they could save a lot,’’ Braunstein said in a telephone interview.
Blum is not loyal to any particular stores; she peruses deals blogs and shops wherever the bargains are, she said.
“Basically I just spend time surfing those and finding the best deals,’’ she said.
“That’s how I save so much, by using those to decide where I go that week.’’
Kroger is among the chains maneuvering to prevent deal-chasing consumers from decamping to rivals. One way is to offer coupons as part of existing loyalty programs, said Keith Dailey, a spokesman for the Cincinnati-based grocery chain.
For example, Kroger’s Plus Card offers shoppers savings of up to $1 off a gallon of gasoline if they stick with the grocer.
“So-called extreme couponers are something that we’re watching,’’ Dailey said in a phone interview.
CVS Caremark, the largest provider of prescription drugs in the United States, requires customers to spend cash-back rewards on a future purchase at a CVS location, ensuring they’ll return, Arbesman says.
Woonsocket, R.I.-based CVS is relying on its loyalty program to drive “profitable’’ sales, chief executive Larry Merlo said in an August earnings call.
“Even with more people abusing the system, there won’t be a pull-back from the store side on offering coupons,’’ said shopathome.com founder Braunstein.
“People will avoid stores that don’t offer deals.’’