The era of the trusty coupon is ending

Not even the pandemic, or the record high grocery prices that came with it, have rekindled Americans’ interest in coupons.
The era of the trusty coupon is ending
Photo: KAREN BLEIER/AFP via Getty Images (Getty Images)
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Americans trying to save on soaring grocery bills seem to have forgotten about an old standby: the coupon.

For decades, US consumers clipped the printed discounts to get a few cents off shopping cart items when budgets were tight. But that practice is fading, and not even the pandemic, or the record high grocery prices that came with it, have rekindled Americans’ interest in it.

“You might be even more time-constrained because of the pandemic,” said Alex MacKay, a Harvard Business School professor and co-author of a new study on coupon use. “You have additional household constraints or you have family members being sick, and you have less time to go shopping. That’s going to offset any potential desire to use a coupon.”

US consumers started ditching coupons in the 1980s, according to the study (pdf), which was also conducted by researchers at Düsseldorf Institute for Competition Economics and Georgetown University. And even as use of their digital version has gone up, overall coupon redemptions dropped by more than half to 1.1 billion from 2006 to 2020.

Though data are not yet available for the last couple of years, the researchers don’t expect the trend to have shifted. 

Why are Americans abandoning coupons?

There are several reasons for the coupon’s drawn-out death. Many Americans don’t pay very close attention to the price of everyday items, or notice small incremental mark-ups over time, so they are unlikely to care about increases enough to use coupons to offset them, according to the study.

“We just know the brands we like, and those are the ones we buy week after week when we go to the store,” said MacKay.

Among those who do watch their pennies, many are not used to coupons. “There are some habits that need to be put into place in order to use them effectively,” said MacKay. “A lot of people just haven’t grown up in the practice of using coupons as much as people did in previous generations.”

Instead, consumers are taking up digital coupons. A third of shoppers who switched to cheaper brands in 2021 did so using them, according research by Inmar Intelligence.

But tech adoption varies by income-level and age. As coupons go digital, older and lower-income populations with less access and ability to use smartphone apps are being left behind.

Companies are promoting more targeted coupons

As shopping becomes more digital, it is easier to target customers specifically for the products they want. Instead of printing and distributing loads of coupons, companies are now using data they have on their customers to promote items they already know they like.

“We are finding that our customers love the personalized coupons, and this approach is driving broader and deeper engagement as well as incremental purchases,” said Vivek Sankaran of Albertsons Companies on a 2021 earnings call.

With algorithms predicting what customers want to buy based on their past purchases, and apps automatically applying discounts at the check-out, it probably won’t be long before the trusty paper coupon fades away entirely.