Information wants to be free, and eventually, it will be. At some point in the future, a consumer is going to be able to say, “am I paying too much for this exact pair of socks / dog sitting service / whatever”? An app (or whatever comes to replaces apps!) will give comparable prices. There are some services that even claim to offer this now, but of course they only work in a very limited range of products/services and in limited geographies. Eventually: all of this information will be readily available.
With better information, margins will likely become lean, but consistent: Gone will be big margins on a few lucky sales, but deep clearance prices will likely also dry up, as well.
What happens when price is no longer the top competitive feature? What happens to coupons?
There’s absolutely still a great place for coupons, in an information-rich world. But they’ll have to change.
Once, we made an update to a coupon, which we previously had identified as “20% Off Any Service.” The offer is now, “Free Bottle of Carpet Spot Cleaner with Visit to Store.” We like the new version much better, we think it’s simply a smarter coupon. By giving away a relatively inexpensive, but still useful item, they’re enticing traffic into their store. They’re opening themselves up to conversations with potential customers. They’re building relationships. They’re not talking price, they’re talking service, expertise, relationship. Coupons can encourage virtues other than low price, they simply need to be positioned slightly differently from the current norms.
