Promo - October 2008 - (Page 23)

Industry Trends Report 2008 COUPONS Dishing out Discounts Coupons were distributed in big numbers last year and shoppers, troubled by economic woes, turned in billions of them, marking the first time in 16 years that redemption did not decline. Consumer packaged goods marketers issued 302 billion coupons in 2007, an impressive 6% increase over 2006, or a whopping 16 billion more coupons. They also fine-tuned the mix, reducing the number of offers by more than 8% while increasing the circulation of those offers by nearly 5%, according to CMS, a promotions logistics company. “It’s a different strategy to more mass marketing versus a more targeted approach,” says Matthew Tilley, director of marketing for CMS. The value of the coupons totaled about $387 billion, a big jump compared to the $337 billion in 2006. Making coupons even more attractive, the average value of an offer increased 10 cents, to $1.28, outpacing the price increases of food for the first time, CMS said. “If the value doesn’t appear worth as much as the year before, it doesn’t feel like it’s worth the effort,” Tilley says. “That also plays into the mass advertising strategy, because when trying to attract new buyers, you need to offer them a richer offer versus a loyal customer who will probably buy your product even without the rich incentive.” The boost in value and sheer number of coupons available helped improve redemption. Consumers turned in $2.8 billion of the total $387 billion in available coupon value, or $8.57 per person. That added up to 2.6 billion coupons redeemed in 2007, or 2.6%, the first time since 1992 that redemption did not decline, CMS said. Early reports through the first half of 2008 indicate that the economy continues to play a role in maintaining flat redemption, Tilley says. Internet coupons redeemed at 1.82%, according to CMS. “As the economy softens and the economic indicators point south, coupon usage picks up,” he says. In tough times marketers push out coupons, shoppers turn them in /Patricia Odell azines (2.1%), newspapers (1.2%), in/on-pack (1.2%), Internet (0.4%) and military (0.1%), NCH said. “It’s an inexpensive way to reach millions of consumers at one time; the typical FSI on a given week will reach 60 million households,” Brown says. Eight-nine percent of consumers surveyed said TOP RETAILERS IN U.S. CPG they use the coupons, COUPON REDEMPTION with 64% using them 2007 2006 with “some regularity.” Retailer Coupon Coupon NCH also found that Rank Rank for the first time in over Walmart 1 1 a decade, redemption had not declined but Kroger 2 2 remained flat with last Military Commissaries 3 3 year at 2.6%. Ahold 4 5 When consumers were asked why they Supervalu 5 4 had clipped coupons Source: NCH Marketing but not used them, 31% said they found NCH Marketing, a promotional another product at a better price in marketing services company, also the store, 24% reported that the purreported an increase, albeit a smaller chase requirement was too high, 13% one. It reported that of the overall 285 ended up not buying that product at billion consumer packaged goods couall, 11% said the coupon had expired, pons offered, the share of grocery couand 8% said the discount was too pons distributed grew to 66.8%, or 190 small, NCH said. billion, in 2007, from 63.9% in 2006. Marketers cut the average redemp“Food prices increased in 2007 for tion time down from 2.9 months to consumers, so that would mean that 2.5 months in a bid the marketer needed to promote to to suppress redempSNAPSHOT the consumer to help compensate for tions and cut costs. 302 billion coupons issued in 2007, a 6% that and keep sales at or above goals,” “These marketjump over 2006 says Charlie Brown, the vice president ers are printing of marketing for NCH. money. They don’t Redemption remains ﬂat at 2.6% for ﬁrst time On the other hand, coupons for want more than 1% since 1992 health and beauty products dipped to of those to ever get 33.2%, or 94.8 billion coupons, from turned in, but in Free-standing inserts top list of distribution 36.1% in 2006, NCH found. spite of the fact that methods Free-standing inserts continue marketers tried to to lead the way marketers distribute suppress redempcoupons (88.1%), followed by handtion, consumers wanted to save,” P outs (4.7%), direct mail (2.2%), magBrown says. l 23 october 2008 / WWW.PROMOMAGAZINE.COM / Promo http://www.promomagazine.com

Table of Contents Feed for the Digital Edition of Promo - October 2008

Promo - October 2008 Contents Editor's Note 'Happy' World Legal Challenges Enter the Dragon 2008 Industry Trends Report Overview Direct Mail E-mail Coupons Event Marketing Games, Contests and Sweeps Interactive Licensing Loyalty Marketing Mobile Marketing P&I Product Placement Retail Sampling Q&A: Hoop Dreams Pro Awards Finalists Resource Center The Agency Center Compassion Fatigue Index of Advertisers

Promo - October 2008

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