Coupons emerged as an innovative marketing tactic in the late 1800s and quickly demonstrated an ability to generate sales.
Thanks to their effectiveness, coupons became an indispensable component of marketing strategies for consumer packaged goods companies, as well as, retailers.
The origins of the first modern coupon can be traced to the Coca-Cola Company. In 1888, the company created a coupon that could be redeemed for a free glass of the new beverage as a means to generate trial and repeat purchase behavior. In the two decades that followed, the company had redeemed roughly 8.5 million coupons and their usage was credited with launching one of the world’s most iconic brands.
Other consumer packaged goods companies took notice of the effectiveness of coupons and before long their usage was widespread. Brand marketers became increasingly sophisticated in their usage of coupons as well, adjusting face values and expiration dates as warranted by economic conditions and shopper sensitivities and deploying coupons as part of an offensive and defensive strategies.
More recently, the traditional physical coupon distributed through magazines, newspapers, direct mail and in store methods, has taken a new form thanks to the advent of digital technology. Brand marketers are now as likely to distribute coupons through email, social media, mobile devices or have incentives directly linked to retailer’s loyalty program to minimize the burden on shoppers to take advantage of the offer. Despite the technological advances, the traditional print coupon remains highly relevant.
Contribution to Retail History
From the time coupons were first introduced in the late 1800s, they have remained a highly effective strategy to generate sales, target new consumers, and introduce new products. Even with the strategy among several retailers to adapt an everyday low price strategy, coupon usage continued to increase. Brand executives realize the importance of coupons to promote existing products and launch brand extensions and new SKUs.