Do Online Coupons Still Make Sense?

Opinion: Coupons are a time-honored retail tradition, but like secret Black Friday promotions and regional pricing, there is a good argument that they may no longer make sense.

There are many Web sites today that are designed to empower consumers, often ostensibly against the interest of big business, whether those are major retailers, government agencies or large publishers.

Some of the more interesting ones help consumers get around mandatory free site registration—such as BugMeNot—or get to a human voice when locked inside voice-system hell, a la gethuman.

Some sound rebellious, but they are actually advancing the cause of the big companies in question, such as those that offer "cheats" for video games or reveal the codes to access DVD Easter eggs (hidden videos), both of which have the direct impact of boosting sales for the makers of those video games and DVDs. Still, they provide tangible benefits by making life easier and more interesting for consumers.

In retail today, though, this online naughty/nice division gets a lot murkier. Last year, there was a lot of attention paid to a series of Web sites that published the ads for Black Friday sales before they were supposed to be published. Leaks from newspaper printing facilities were often the problem; look for many of those sites—including an updated version of Black Friday 2005, GottaDeal.com and BlackFridayAds.com—to return this year. But even though several retailers tried to stop those sites from disseminating the sales data early, the sites still promoted those retailers and pushed merchandise the retailer was trying to discount anyway. In other words, there is a huge question mark about whether those Black Friday sites ultimately helped major retailers a lot more than they hurt them.

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The Black Friday sites last year raised a deeper question, which is whether the effort to keep Black Friday sales secret was an objective that even made sense anymore, given the Web realities.

A similar retail strategy question—which is deeply intertwined with e-commerce strategy—is the role of the online coupon and the corresponding coupon code. For the purpose of this column, lets separate all coupon codes into two categories: those that are intended to be for everyone (such as free shipping at Amazon.com for orders worth more than $25); and those that are intended for a limited audience, such as those aimed at infrequent shoppers or consumers who have completed a survey or been given a credit.

There are several sites today that publish lengthy lists of coupons, including the aforementioned GottaDeal.com, CouponMom.com, Ebates, CouponCabin and DealHunting.com. But these coupons are overwhelmingly the "intended for everyone" kind, generally grabbed from online ads that the retailers place on other sites.

If the sites were truly renegades of the "Steal This Book" variety, they would be a lot more interesting, and the dissemination of coupon codes would be treated just like any other leak of proprietary information. But theyre not. The sites are generally actively supported by major retailers and simply consolidate information about discounts that are available to pretty much anyone who asks.

Hence, the question: Do coupon codes that are intended for everyone make sense anymore? Does a retailer want consumers to not have this information, in the way that product managers spreadsheets assume that a certain percentage of people wont bother to get their rebate? In most instances, the discounts are intended to encourage sales, and there seems to be little reason to not shout about them from the highest POS (point of sale).

Retail operations are changing rapidly, with online chat sessions now based on the keystrokes of consumers that connect them to an expert on the product theyre looking at. Why then is so much of retail operations today based on continuing the way business has been done for years, with no one asking if todays changing environment makes various procedures no longer rational? If these sites do little more than help retail IT execs and e-commerce managers question long-held retailing assumptions, theyll have done some good.

Evan Schuman is retail editor for Ziff Davis Internets Enterprise Edit group. He has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop anytime soon. He can be reached at Evan_Schuman@ziffdavis.com.

Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

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