Over the holidays, many shoppers were keeping their budgets in line by searching out the best bargains, then cashing in on even greater savings with store-sponsored coupons.
Macy’s shoppers were encouraged to use coupons that can only be used if the shopper paid with their Macy’s credit card or a store gift card. It’s a smart way to protect endangered margins in the increasingly discount world of the venerable retailer. Customers holding charge cards often receive the coupons in multiples, multiple times a year.
A friend recently watched a Macy’s customer charge $185.00 worth of discounted merchandise, then immediately make a $185.00 payment on her account. Worked like a charm.
Another Macy’s customer had the sales person ring her purchases in small batches, so she could maximize her coupons. Apparently she grouped merchandise that added up to a little over $50, and then used a coupon good for $15 off a sale of $50 or more. Next she grouped another batch of merchandise to use the coupon that gave her $25 off a purchase of $100 or more. Her last grouping just used the overall percentage off value. Three transactions, complete with payment and receipt, for what would have been one purchase in days gone by.
The moral to the story is that customers receiving multiple coupons will find a way to get the most that they can out of them. It’s up to each retailer to work through the variables that impact margins, operations and ultimately brand identity.
While it’s relatively easy for strategists to calculate coupon impact on revenues, there’s more to the house of cards. What are the impacts on service delivery when most customers ask for more than one, and often three or four transactions? What happens to the brand experience, critical to the brick-and-mortar experience, when long lines are slowed by customers working the coupon system to the max?
Nobody believes more than we do at Yaffe that providing strong values are critical to retail success these days. However, protecting threatened margins and providing a good in-store experience is just as critical.
Don’t forget that the entire experience – especially at the store level – will impact hard-won brand identity. Maybe positively, maybe not. That’s why you have to look at every tactic to drive sales from multiple angles to see not just how it fits into the entire marketing mix, but into the whole brand experience as well.
What do you think? Have you seen similar tactics being worked around by customers at the store level? I’d love to hear from you.