Why Coupons, Online Promo Codes, and Extreme Couponing Are Doomed

Coupon codes and promo codes allow online shoppers to obtain discounts that they normally wouldn’t when purchasing an item. Extreme couponing allows carts full of products to go out the door for pennies. In this depressed economy, people all over want to know “how to coupon?” All these discounts and in fact the entire method of coupon shopping, is doomed.

Why are coupons doomed? There are a number of reasons to support the doom of both printed coupons and electronic coupon codes. couponare New technology is a prime reason. Limiting fraud is another. Finally, new forms of advertising and discounting will combine to form a new method of shopping.

Technology such as behavioral pricing, advanced customer segmentation, and dynamic demand pricing allow online retailers to price discriminate at finer and finer levels than ever before. This means that combining vast amount of customer data available in merchant databases like purchase history, customer demographics, and social media, online merchants can deliver different products and pricing to each site visitor. Imagine that you tweet your friends that you want to buy a new computer, and you post about this on your blog or in a comment. Amazon, knowing that you have searched for computers recently and finds links on a blog comment that tracks back to your profile, increases the prices on all computer items presented to you across all categories. Using browser history, demographics and a global purchase history, a merchant presents an upsell offer bundling a number of high-end related items.

Dynamic pricing isn’t limited to websites and the online world. The New York Mets plan to roll out dynamic pricing for seats across the entire stadium. There have always been premium games against the most popular teams, but imaging getting a discount because a star pitcher got injured or paying more because the team is suddenly in contention in September. How much longer until this spreads to grocery stores? Picture paying more for a box of Cheerios because Corn Flakes are out of stock, or a quarter more per gallon of gas on the way home from work at 5 o’clock versus the price at 11 o’clock at night.

Advanced loyalty cards and mobile payments will also change how coupons and discounts work in the real world. Electronic discounts loaded directly to a loyalty card or account won’t require customers to bring printed coupons with them to the store. They will simply be credited automatically at checkout. Eventually customers will be able to manage their loyalty accounts online, and select which coupons, deals, and special offers to load directly from merchants, the sponsoring companies, or even individual products. Mobile payments will work similarly, with discounts being credited to accounts directly after visiting a promotion site or liking a company on their Facebook page or the social media site. With all the additional customer data these advances will bring merchants, they will be able to reward their best customers with specials, better manage inventory, and in general the power will shift from consumers to merchants.

Besides presenting more targeted marketing preventing fraud and abuse is important for both merchants and sponsors. Brick and mortar stores have started to limit coupon use at the shopping trip, account, and monthly levels. Extreme couponing, where cart-fulls of product go out the door for pennies after absorbing 30 to 60 minutes of checker and bagger time, is ending. Double coupon days are finished, as are the acceptance of printed coupons from the internet. The sharing of coupons and buying multiple papers for the coupons will end as retailers again limit the use of both specific coupons and total coupons over periods of time such as a rolling 3 month period. Additionally, for the printed coupons that are distributed, expect to see anti-counterfeit properties coming, such as Nano-holes that provide a bright shimmering effect. With the individualized electronic discount and personalized promo codes, and the uniquely coded paper coupons, sharing, trading and duplicating these will be impossible, or at least beyond the casual shopper.

Coupons may not disappear, but in their current form, they certainly are doomed because of a period of rampant fraud and abuse by the few extreme coupon users. Expect more personalized and useful discounts applied to an individual account or mobile phone, and uniquely coded 2d barcodes coming to coupons that track the user account, distribution method, and location.

 

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