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Marketers Increase Coupons, but Redemption Is Down

February 25, 2014

By Karl Greenberg, MediaPost

Coupon use is down, but still strong. And the growth area is non-food. According to NCH Marketing's 2013 Year-End Topline Coupon Facts report, the number of coupons issued to consumers for CPG products increased by 3.3% last year to 315 billion coupons distributed. But the total volume redeemed decreased last year by 3.4% to 2.8 billion.

Consumer interest in coupons remained strong, however. A report by NCH Marketing's parent, the 2013 Valassis Shopper Marketing Survey, found that about 81% of consumers reported using coupons regularly last year. Among those who reported using more coupons than the year before, 45.7% said they found that more coupons were available to them.

Non-food categories drove increased coupon use. Marketers distributed 5.8% more coupons in non-food last year, while food marketers distributed about 1% fewer coupons. Non-food redeems at a lower average rate than coupons promoting food products, notes the report.

Among those consumers who reported using fewer coupons in 2013, the most common reason — articulated by about 49% of respondents — was that they could not find coupons for the products they wanted to buy.

In terms of media, old-fashioned FSI's (free standing inserts) continued to grow as the dominant vehicle for distributing coupons, accounting for 91.2% of all coupons distributed and 50.8% of all coupons redeemed, per the report. But while they have broad reach, they also have low redemption rates.

The study says digital coupons (including print-at-home, mobile, social, and downloadable coupons to a loyalty card) continued double-digit growth in 2013, although they still account for less than 1% of all coupons distributed, and their audience reach tends to be comparatively small. The redemption generated by digital coupon formats grew to slightly more than 10% of the total market volume.

The media mix has been toward the right blend of print, digital and in-store to optimize audience reach throughout the purchase path. FSI coupons have broad reach and relatively low redemption rates, but are popular with marketers who want to use them as a way to build shopper brand awareness.  

The research said there was also a trend toward marketers offering higher average face value, while offering less time to redeem coupons: from 9.3 weeks in 2012 to 8.6 weeks last year. The food segment saw the biggest drop in duration of offers. Thus, 28.7% of consumers who reported using fewer coupons in 2013 said the reason was that the coupons expired before they have a chance to use them. That was the second-most-cited reason for reduced use. In the food area redemption was flat last year, while media mix, products promoted and short duration resulted in a 100 million decrease in redemption volume.

Grocery stores experienced the smallest decline in redemption volume; mass market was down 6.3%; drug coupon redemption was down 2.8%, and the rest of the retail formats dropped nearly 12%.

Source

"Marketers Increase Coupons, but Redemption Down." Karl Greenberg. MediaPost, 02/25/14.

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