Research into the use of promotional codes has shown that UK customers are increasingly basing their buying decisions on being able to find special offers, with retailers at times struggling to satisfy consumer expectations. 70% of survey respondents said they typically spend upwards of ten minutes searching for promotional codes at the point of purchase – equal to the average amount of time spent on retailers’ websites in the first place.
The research was conducted by business incubation network Sussex Innovation on behalf of its member company Uniqodo, a unique voucher code generation platform. Researchers collected survey responses from 250 consumers and 25 retail sector businesses, as well as conducting in-depth interviews with senior professionals at eight retail brands and one e-commerce consultancy. The conclusions have been published in a report, Overcoming over-discounting: are promotional codes the next frontier in data-driven marketing? You can read analysis of that report here.
The impact of promotional code aggregation websites on the online retail market was found to be growing - two-thirds of consumers have used these sites to source a code in the past 3 months, with 44% claiming to use them more regularly than they did last year.
Researchers noted that retailers shared common concerns about the prevalence of sites distributing generic codes across large online communities, with both the potential for ‘over-discounting’ and reputational damage to brands’ status cited as pressing issues that retail marketers face.
In recent years, many consumers have grown accustomed to getting a deal, with 43% reporting that they will consciously avoid paying full price for products online. However, just 17% of consumers confirmed retailers’ fears that frequent discounts implied lower quality products.
The report concludes that promotional codes have fallen behind other marketing tools in the age of e-commerce, by failing to provide the level of personalisation and innovation that consumers have come to expect of campaigns.
“With retailers able to track their customers’ interests, actions and purchases in more granular detail than ever before, it’s interesting that promotional codes are one tool that has actually become less attributable since the days of printed vouchers,” said David Hall, co-founder of Uniqodo. “This challenge is something that marketers are all too aware of, and we believe that it’s only a matter of time before the balance begins to tip back and retailers reclaim control over promotional codes as a more strategic part of their toolkit.”