It's easy to forget that voucher, or coupon shopping to use its USA definition, is more than 120 years old. Coca-Cola is widely regarded as the company that first brought couponing to the masses, beginning in 1887. It's believed that two decades after they launched their first campaign, one in nine Americans had redeemed a Coca-Cola coupon. With a history like that it's hard to believe the voucher shopping of today really has a limited time left in the conscience of consumers and retailers.
Online retailers first realised the power of the old-fashioned coupon code in the 1990s, and since then online voucher codes have soared in popularity. In 2014 a staggering 55% of Internet users in the US redeemed an online vouchercode. The UK is following a similar trend. A study commissioned by Voucherbox earlier this year claimed that online vouchercode use increased by 43% in 2014, while 17% of the consumers studied described themselves as 'regular' online vouchercode users. Importantly, the same research also found that young people (18-34) were more likely to look for a deal than any other age group, which suggests online vouchercodes resonate with an Internet savvy, and deal-orientated, younger audience. This fact, more than any other, means online vouchercodes are here to stay as long as the value they offer is tangible and retailers remain savvy about how to deploy them.
The online vouchercode gave rise to the vouchercode website in early 2007. Sites like myvouchercodes.co.uk and vouchercodes.co.uk pioneered the concept of aggregating a large number of codes and deals from across the Internet into one place. From the outset, these sites used affiliate marketing as the obvious way to monetise their listings and build closer relationships with advertisers. The growing importance of vouchercode shopping can be highlighted by the growth in their prevalence at Affiliate Window. Here is a breakdown of the network's affiliate mix in percentage terms over time, which highlights how ‘vouchercoding’ has maintained significance over the years.
Advertisers are certainly getting more sophisticated in the way they generate and issue their online vouchercodes. Over 60% of advertisers that issue vouchercodes to the affiliate channel on Affiliate Window now do so with conditions in place, such as changes to commission or the way the transaction is attributed when a code is used. This underlines how they’re starting to think much more carefully about the impact codes have on both their customers and bottom line.
Constant evaluation when it comes to understanding the value of vouchercodes needs to maintain a healthy pace for the model to stay relevant. Undoubtedly, codes can drive volume and shift stock. But advertisers need to pay attention to the impact on ROI, not to mention how they impact other marketing channels. We already know in the affiliate world that the most common type of customer journey involving more than one affiliate is a journey that contains two voucher code sites, highlighting how users tend to 'bounce' between code sites looking for the deal they want.
Advertisers working with us are using this knowledge to develop bespoke strategies for getting their codes to consumers, such as single use codes, value-add vouchers and variable commission payments per code to balance ROI. It's tempting to think these 'strategies' are a form of trying to police a marketing model with limited value, but that isn't the case. A few years ago advertisers were pointing the finger at code use in the affiliate channel and saying it damaged value. However greater understanding of how their codes are distributed and used online has actually led advertisers to a form of reconciliation with the vouchercode, and now advertisers are trying to adapt to ensure they can use vouchercodes successfully alongside all their other online marketing channels. Controlling where and when a vouchercode box appears on their site is just one way many advertisers manage their vouchercode strategies, to ensure maximum value with minimal impact. Ultimately it’s about control: if an advertiser feels they are in charge of where codes appear and how they are managed then they feel far more confident in deploying them.
There are more evolutions that need to come. One in particular, is to better recognise the obvious fact that vouchercodes aren't always needed to 'get a consumer over the line'. Sometimes they are just a happy coincidence for a consumer that's already on their way to purchase. Innovations like basket-freezing and assist payments are now being used in the affiliate industry to meter the impact vouchercodes and vouchercode sites have on a retailer's marketing strategy. The other is definitely more diverse ways for retailers to get vouchercodes to the consumers that want them, in particular, targeted codes delivered via mobile and tablets, and the greater understanding that vouchercodes can be distributed by a large number of different affiliate partners to target a greater variation of customers.
As long as online retailers need to be competitive and consumers want the best deal, online vouchercodes will always have their place. More evolution in the way codes get to consumers and more sophisticated management of the impact codes have on online marketing strategies is the key to the model's continued survival.