The Journey of the Coupon – Brief History

Part One

Coca Cola: A brand that almost looms too large to be called a brand (perhaps super brand is more appropriate) take the majority of credit for inventing the marketing and advertising strategy of the coupon. Their early success pivoted on this scheme.

It gave unaware customers a chance to taste the new drink for free, with the company having enough confidence in their product that the same people would be happy to pay for the same product after the coupons had been removed from circulation.

Apparently, Coca Cola gave away around eight and a half million drinks in a period of around twenty-five years (1888-1913). They, undoubtedly, needed a good product for this to be successful, but the appeal of the coupon played a significant role in the early success of this now super brand.

Other companies began to follow, as they always will when a scheme has been proven to work, and the coupon soon became the standard way to introduce a new product to an unsuspecting public. This was partly due to the brands seeing what the coupon did for Coca Cola, and partly because the public expected it.

They were far more willing to try a new product if at least the first one was free. This became normality, and as is often the case, even though sometimes it doesn’t seem to be the case, the customer has more influence and power than they might at first think. Companies will change to suit customer expectations, and after the turn of the twentieth century the customers expected coupons.

The next development of the coupon came during the 30’s, and because of the great depression in the United States. The times were so hard that the coupon became normality for all products, and not just introductory products, and for all companies, independent of how large the company was and how long they had been in business.

All companies were frightened during this time; all they needed to do was to keep selling until the end of the depression. They knew it would end sometime, so making a loss on a product hardly seemed a concern. They simple had to stay in business, and coupons were the desired way in which to ensure this happened.

A scene in the iconic film, It’s a Wonderful Life, works as a visual representation of this point. The orchestrated bank run on George Bailey’s Bailey Savings & Loan threatened to put them out of business, but George knew that if he could just see out the day with at least one dollar in the safe then they could live for another day.

This is how businesses felt during the great recession of the 30’s, and largely how many businesses feel a lot of the time: if they can just go to sleep at night with even a minimal amount of money in the safe then they are still alive. Most of the companies that saw off the great depression used the coupon (interesting to know is that the Danish term is rabatkoder) like a heart to keep the money circulating.

Part Two

Part One finished on a bit of a quiet and sombre note: the great depression of the 30’s. The next step, naturally, is the 40’s and the end of the great depression. Some argue that the effects of the great depression outlasted the official end of it, and it is therefore unclear as to when one should say it actually ended, but, for the convenience of this article, lets agree that the 40’s signaled the end of the great depression.

The way in which businesses used the coupon during the 40’s led to a real change in the way people shop, and this can still be seen today. The decreasing prominence of small baker shops, butchers, and greengrocers is no coincidence and not without good reason.

Many people are more than aware that it was the rise in supermarket chains that caused this change, but of those people very few of them are aware of the reason behind the success of the supermarket chains.

The answer is: coupons. Just as Coca Cola used them to start their business, and as businesses used them during the great depression to keep afloat, supermarket chains used them to change the way people shop for one of the most important items of their life: food.

They used them in far more dramatic and aggressive ways that customers were used to. Supermarkets published coupons which were so affective that they caused the supermarkets to make a loss of the advertised item. All they wanted was to get people through the doors; once they were inside they were bound to pick up some other items of which the supermarket made a healthy profit from. Smaller stores had no chance. By the mid 1960’s over half of families were cutting and collecting coupons from their magazines and newspapers.

Then the internet came and changed everything. No business or customer has been unaffected by the mass application of the internet. One of the changes the internet has affected is the coupon becoming the coupon code, and just as the 40’s coupon changed the way people shop, the internet coupon is currently changing the way people shop.

As hinted at previously in this article, a customer does not change their shopping habits lightly. It took mass savings to draw customers to the supermarket, and it is taking mass savings to bring customers online for their shopping. Once online, the customer realises it is a safe process, and that the convenience of it more than lives up to the promise.

All the customer needed was the little nudge towards online shopping, which was exactly what the coupon code managed to do. The design of the websites onto which the coupon codes are stored is a major advantage for the customer. It has never been easier to compare deals.

This has caused brand loyalty to be less important than it once was, and it isn’t difficult to imagine this becoming even more the case in future years. The internet causes customers to be more influenced by price than any other field.

The current economical state is arguably as responsible for this new generation of coupon as the internet is responsible. Is it a coincidence that the coupon code is prominent today, during a recession, as the coupon was prominent during the great depression?

As discussed in this article, there are many comparisons between the coupon code of today and of its origins. Another consistent thread throughout any coupon is that it empowers the customer and always saves them money.

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