After seeing the great post that Melissa Campanelli, editor-in-chief of Target Marketing’s eM+C brand and Retail Online Integration, wrote from our eTail West event, I reached out to her to see if she and her team would be willing to contribute to the eTail Blog. And guess what? They were thrilled to participate! So now, our friends at eM+C and Retail Online Integration have agreed to contribute a blog post a week to us – and we’re starting with the below, from Aaron Mendes, who writes here about E-Couponing – a phenomenon made ever more popular by firms like Groupon, LivingSocial and more. Enjoy, and keep your eye out for a weekly post from the ROI folks! – Kelly, Editor, the eTail Blog

By Aaron Mendes

Special to the eTail Blog

With the recent economic uncertainty, consumers’ purchasing strategies have dramatically changed over the years. Many are turning to e-coupons not only to save money, but to avoid looking for print coupons and the hassle that comes along with them — i.e., getting in your car, driving across town to find what you’re looking for, then standing in line to purchase it.

A purchase that takes shoppers an hour or more to complete with print coupons can be completed online using e-coupons in less than five minutes. As a result, the e-couponing industry will continue to grow at a rapid pace with several distinct trends emerging over the next few years.

Specifically, as mobile devices continue to flood the market, retailers will begin using personal preference, shopping history, spending habits and geo-location to reach consumers. Services such as Foursquare have already begun to try and capitalize on this strategy, but a lack of local coupons available in most areas has prevented them from really taking off.

Scannable barcodes will also grow in popularity, as coupon barcodes will be delivered via smartphones and applied to in-store purchases at stores such as Target. The use of daily deals has been shown to drive traffic to local stores. However, stores will eventually become inundated by requests from daily-deal sites, ultimately allowing only a few successful sites to emerge. These practices will truly maximize the consumer shopping experience and help retailers drive sales.

As e-couponing continues to grow, retailers should make them an essential part of their overall strategy. While some retailers think offering coupons will hurt their business, there are several benefits companies can look forward to if they use a strategic approach to offering discounts. They include the following:

• Increased website traffic: Users are more likely to visit a website when there’s an incentive. A coupon strategy can yield increased website traffic and conversion rates.
• Customer retention: Coupons can serve as a tactic for retaining customers by providing them with exclusive perks via digital communications. Special coupons or daily deals prompt customers to return to your website regularly, increasing traffic and sales.
• Increased sales: More often than not, consumers will purchase an item they’re undecided about if it’s on sale. Once a customer visits your site, you have the opportunity to upsell and increase the number of items purchased by them.
• Distinction from competitors: Coupons contribute to a retailer’s positive image and reputation, which helps it become more prominent on a shopper’s list of retailers. Consumers perceive value benefit over other websites when they’re saving money on your site through coupons.

By offering e-coupons to consumers, retailers can capitalize on multiple positive effects — e.g., attracting new customers, increasing consumer retention and enhancing the overall customer experience. If the additional sales volume, brand notoriety and reputation are able to compensate for the slight decrease in profit margins, consider using e-coupons. As technology continues to advance, retailers and marketers must adapt to reach audiences in new ways.