Consumer Coupon Usage

February 26, 2010 at 10:00 am (News)

The rebound in coupon redemption in the past year is attributable, at least in part, to the state of the U.S. economy.  General consensus is that the current recession began in the latter part of 2007, with conditions worsening throughout 2008.  It was during that time that coupon redemption began to level off from the downward trend it had been experiencing.  With coupon redemption climbing 26% in the first nine months of 2009, when compared to the same period in 2008, coupon redemption is once again closing in on the 3 billion mark.

Historically, coupon redemption and economic conditions have been linked. There is an inverse relationship – as the economy worsens, coupon redemption in¬creases. But with this renewed interest come reasonable questions about who is using coupons and how they are using them.  Inmar’s Advantage Update, “The 2009 Consumer Study” takes a look at these questions in light of today’s economy.  Following is a sampling of the statistics contained in the study.

The data was segmented into six coupon user groups based on semi-annual purchasing of units with a manufacturer coupon in the first half of 2009.

The following key learnings regarding consumers and coupon usage were derived by combining data from the Inmar database with data from the FMI’s “2009 U.S. Grocery Shopper Trends” and Nielsen’s “Manufacturer Coupon Sourcing” study:
• 29% of consumers reported spending more on groceries in the past year, while 28% reported spending less (FMI).
• In early 2009, consumers spent an average of $98.40 per week on groceries (FMI).
• The percentage of consumers who reported looking for cents-off coupons received in the mail or from newspapers and magazines and those who reported using cents-off coupons received in the store to plan their grocery shopping trips increased in 2009 (FMI).
• 75% of all respondents stated that coupons had at least some influence on their decision to purchase a new product (FMI).
• Consumers made an average of 2.0 trips per week to the supermarket or grocery store (FMI).
• 68% of U.S. households used a coupon in the first six months of 2009 (Nielsen). 
• 81% of all units purchased with a coupon in the first six months of 2009 were bought by 19% of all households (Nielsen).
• 48% of all products purchased with a coupon in the first six months of 2009 were dry grocery products (Nielsen).
• As grocery spending shifts to non-traditional grocery outlets, coupon redemption has followed. One negative effect of this shift is that consumers tend to associate coupons with conventional supermarkets and may not think of using coupons in non-traditional locations (Inmar).
• Consumers who use fewer coupons spend more per shopping trip (Nielsen).
• Affluent households tend to be heavier coupon users (Nielsen).
• Large households tend to use more coupons (Nielsen).
• White households are more likely to be heavier coupon users (Nielsen).
• Hispanic coupon users are less likely to be heavy coupon users (Nielsen).

The data quoted in this article and more can be found in Inmar’s “The 2009 Consumer Study” Advantage Update by clicking here.

http://www.promotionsinfonow.com

Advertisements

Permalink Leave a Comment

Coupons and the Military

February 25, 2010 at 9:13 am (News)

Coupon marketers are constantly on the look-out for overlooked sources of coupon-prone consumers. Turns out, the 1.4 million active military personnel worldwide match up very well with the typical coupon-prone profile. And the military market has the additional benefit of having extremely targeted outlets and coupon distribution methods. These two facts combine to generate above average coupon redemption for the few manufacturers targeting this segment.

Targeting is key in the most successful coupon promotions. Responsible for the majority of all military coupons submitted, the Defense Commissary Agency (DeCA) and the Army and Air Force Exchange Service (AAFES) are easily targeted channels. Also contributing to the attractiveness of this segment, are three primary couponing methods for reaching military personnel:

• Military Handout (MHO):  A coupon handed directly to the consumer at a military retail location. 
• Military Magazine (MMG):  A coupon distributed through magazines targeted at military personnel. 
• Military Shelf Pad (MSP):  A pad of coupons placed on shelves near featured products in military commissaries.

As the chart shows (*) military coupons generate higher redemption rates than their non-military counterparts. The fact that the military coupons are targeted to a specific group offers some explanation. Source: Inmar’s Advantage Update “Military Coupons”, 3 – 2009

Overwhelmingly, military coupons stand out for their superior performance, more appealing characteristics, and targeting potential. Manufacturers that have tapped into this often overlooked segment have enjoyed these benefits and found another unique way of supporting the military.

Pulling from a rich internal database, Inmar has been able to derive the following key learnings regarding military coupons:

• Inmar tracks three types of military coupons: military handout, military magazine and military shelf pad. As you enter coupon offer codes into Alinea®, it is important that you assign the correct method code to the offer. An incorrect method code can cause an inaccurate redemption forecast.

• Annualized distribution and redemption volumes for all forms of military coupons increased in 2008, as did average face values. In contrast, average expiration periods for two of the three methods decreased.

• Despite having lower face values, shorter expiration periods and requiring more multiple purchases than their non-military counterparts, military coupons generate higher redemption rates.

• Not surprisingly, DeCA and AAFES are among the top corporate entities submitting coupons. Many traditional retail outlets also submit coupons due, in part, to having stores located in close proximity to military bases.

• When the percentage of total coupons withheld for mis-redemption by method is indexed against the percentage of total coupons paid by method, results show that military coupons are likelier than other methods to be mis-redeemed.

More information about the subject can be found in Inmar’s Advantage Update, “Military Coupons”.

(*) Chart can be viewed at Source: http://www.promotionsinfonow.com

Permalink Leave a Comment

Coupon Use Rises 27%, Drives Redemption to 3.3 Billion in 2009

February 24, 2010 at 8:59 am (News)

Spurred by a sour economy, consumers used 27% more coupons in 2009.  This renewed interest sparked the first annual increase in coupon use since 1992, and drove redemptions to 3.3 billion.  The rising trend started in October of 2008, coinciding with news of the US financial crisis.  That led to five consecutive quarters of double-digit growth (versus the same period of the previous year).

Brands Make More Coupons Available

While consumers used an amazing $3.5 billion worth of coupons, brands did their part by supplying an unprecedented number of incentives.  Despite the tight economy, marketers boosted the number of coupons available to the highest level recorded since Inmar has been tracking the data.  Brands issued 367 billion coupons, at an average face value of $1.44 – an investment that strongly indicated that they were committed to promotion.

All of the Promotional Bang, Less Promotional Buck

But even as brands increased the number of coupons available, they did try to mitigate the cost of increased redemption by maintaining face values and keeping expiration periods in check.  In 2009, face values declined by a penny, reversing a multi-year trend of increasing values.  Expiration periods were shortened by 10% last year, despite years of virtually no change.

Food Categories Drive Growth Early

During the first half of the year, coupons for food categories drove the increases in distribution and redemption.  Consumers were responding to higher food prices and a growing concern for making ends meet in an economy that looked very dismal.  Marketers were using coupons to minimize losses to low price competitors, such as store brands. 

That particularly strong first half combined with solid growth throughout the year to make food category coupons the leading driver for both distribution and redemption growth in 2009.

Non-Food Categories Take Over Late in the Year

By mid-year, the economic future looked less grim.  Then, coupons shifted from primarily being a way to provide essentials like food toward being a way to enable small household luxuries.  That’s when redemption growth moved to non-food categories.  Second and third quarter both saw coupon redemption percent changes in the mid-forties (compared to the same period the previous year) for non-food category coupons.  

Where is All of This Going?

Of course, we don’t know how long this will continue.  But it does appear that the American public has been fundamentally changed by the events of 2009.  The economic downturn instilled a drive to be smart and frugal about spending and coupons definitely have a role in fulfilling it. 

For the foreseeable future, coupons are back on shoppers’ radar.

http://www.promotionsinfonow.com

Permalink Leave a Comment

Retailers and Manufacturers Fight Coupon Fraud – Counterfeits Rise as Recession Drags On

February 18, 2010 at 7:41 am (News)

By Kate Zhao
Wall Street Journal

Coupon fraud is on the rise and some major manufacturers and retailers are crying foul.

From 1986 to 2001, the Coupon Information Corp., a nonprofit watchdog for the coupon industry, reported only two cases of investigated or prosecuted coupon fraud. In 2007, there were only nine. However, in the last year and a half, there have been 93 such cases and the numbers are expected to continue to rise as the recession drags on and the Internet offers new tools for coupon fraud.

CIC says the cost of these counterfeits has easily been in the tens of millions of dollars, according to a survey of 24 major consumer-products manufacturers. One consumer-product manufacturer estimates its losses to counterfeit coupons at more than $3 million a year.

“People are desperate to steal now,” said CIC Executive Director Bud Miller. “And it’s going to get worse before it gets better.”

Manufacturers and CIC held a meeting in Washington, D.C., last week to update their joint efforts to fight coupon fraud. Techniques used in coupon fraud include reprinting in-store coupons and even smudging barcodes to extend expiration dates.

According to Inmar Inc., a coupon processing agent, coupon redemption in the fourth quarter of 2008 rose nearly 10% from the year before, the first jump in redemption since the early 1990s.

“Consumer response remained strong for the year with 2.6 billion coupons redeemed, the third year in a row at that level,” Inmar said in a press release on its Web site. “The weak economy was a major factor in stopping the steady decline that coupon redemption had seen in the years prior to 2006. The peak year for coupon redemption was 1992, at the end of the last major recession, when 7.9 billion coupons were redeemed.”

Inmar director of marketing, Matthew Tilley, said coupon redemption has surged nearly 17% in the first quarter of 2009 compared with a year ago, and Inmar expects double-digit growth for the second quarter.

Larry Joseloff, vice president of National Retail Federation, said retailers have few options to control coupon usage. They can either set a certain number of times a customer can use a coupon or make each code unique and never issue randomly generated, transferable coupons.

In January 2008, Nestlé Purina Petcare Co. issued 250 coupons for a free bag of its adult dry dog food. As of May 5, 2,754 coupons for the product have been redeemed, the company said, but declined to comment further on coupon fraud.

This month, Coca-Cola Co. had to withdraw a free 12-pack coupon from its “My Coke Rewards” program due to “widespread counterfeiting,” warning consumers in a statement that “attempts to submit counterfeit coupons may result in civil action or criminal prosecution.”

Drugstore chains have also been targeted, with Web sites specifically created to trade or discuss coupon use from the chains.

CVS Caremark Corp. said the Web sites infringe on it intellectual copyrights and said any “links to any printable in-store redeemable CVS coupons are unlawful.”

CVS spokesman Michael DeAngelis says the company’s ExtraCare program, which gives loyal customers exclusive savings from the retailer and its manufacturing partners, such as Unilever PLC and Coke, helps thwart some coupon misuse and online coupon abuse by linking the coupons with customer loyalty cards.

However, Walgreen Co. spokeswoman Tiffani Washington notes the use of “Internet coupons is difficult to control.”

070109
http://online.wsj.com

Permalink Leave a Comment

Digital Coupon Growth Outpaces Inserts

February 15, 2010 at 7:25 pm (News)

During 2009, the growth rate of digital coupons outpaced the typical annual growth rate of free standing insert (FSI) coupons by a factor of more than 10-1, according to Coupons.com.

Coupons.com annual data indicates that savings US consumers obtained from digital coupons grew 170% in 2009, compared to a typical annual growth rate of 8-16% for FSI coupons. Printed savings from Coupons.com and the Coupons.com digital coupon network in 2009 exceeded $858 million, a 170% increase from more than $300 million in 2008. According to Coupons.com, key factors influencing the growth included increased consumer adoption of online printable, save to store loyalty card and mobile coupons and increased use of digital coupons by brand marketers, including manufacturers and retailers alike.

More than 20% of US Consumers Use Digital Coupons

A significant increase in the number of Americans using digital coupons drove their growth in savings. More than 45 million US consumers used digital coupons in 2009, an 18.4% increase from 38 million in 2008. Roughly 20% of the US population used digital coupons last year.

Wealthy, Educated Consumers Use Online Coupons

Despite common perceptions of avid coupon users, consumers who printed digital coupons in 2009 had an average household income of $97,000, 23% higher than the average household income of about $79,000. In addition, 34% of digital coupon users in 2009 held a college degree, compared to 30% of newspaper coupon users and 27% of the general population.

Cereal Leads Digital Coupon Categories

The top ten digital coupon categories for 2009 are: 1. Ready-to-Eat Cereal; 2. Yogurt; 3. Sweet Snacks; 4. Refrigerated Dough; 5. Salty Snacks; 6. Quick Serve Restaurant (QSR)/Casual Dining; 7. Nutritional Snacks; 8. Entertainment; 9. Condiments; and 10. Pizza.

Atlanta Consumers Most Frugal

Atlanta topped the list of the Most Frugal U.S. Cities, with the average Coupons.com user in the Georgia capital saving more than $531 with digital coupons from the site in 2009. As measured by the Coupons.com Savings Index, Tampa, FL followed closely in the number two position.

The top 10 digital couponing cities, with corresponding savings index score, are: 1. Atlanta, GA 918; 2. Tampa, FL 522; 3. Cincinnati, OH 511; 4. Saint Louis, MO 468; 5. Minneapolis, MN 351; 6. Nashville, TN 308; 7. Charlotte, NC 306; 8. Cleveland, OH 272; 9. Pittsburgh, PA 254; 10. Kansas City, MO 254.

Free-Standing Insert Coupon Activity Increases 8% in 2009

Free Standing Insert (FSI) coupon activity increased 8% during 2009 vs. the previous year to more than 272 billion coupons dropped, according to Marx Promotion Intelligence, a division of TNS Media Intelligence. This activity level is the highest yearly coupons dropped observed during the past decade, surpassing the second highest annual Coupons Dropped of 257 billion realized in 2007. During 2009, more than $385 billion in consumer incentives were delivered via FSI coupons, up 15% from 2008.

About the Survey: Coupons.com collected internal user data and other industry metrics.

 http://www.marketingvox.com

Disclaimer:
We always give credit to the writer of a post – however it was not available at Marketingvox.com  /  Should this information become available, we will update this post

Permalink Leave a Comment

Hispanics Go Online for Trusted Info

February 11, 2010 at 8:23 am (News)

FEBRUARY 11, 2010 

Ratings and reviews trump real-world friends

Hispanics are taking to the Internet in greater numbers, closing the usage gap with the general market, and they are enthusiastic about going online. Younger than the overall population, Hispanic Web users trust the information they find online.

A study from AOL found that nearly three-quarters of Hispanic Web users had confidence in product rating sites, for example, compared with 28% who put more stock in the opinions of their friends.

Hispanic users were more positive about many uses of the Internet than the general market, including staying abreast of current events, finding deals and keeping up with pop culture.

According to the study, Hispanics were more likely to turn to the Web in almost every phase of the purchase decision, from beginning the learning process and learning about brands to comparing prices and making a final decision. Only when it came to learning about product features were Hispanics behind the general market in Web usage.

Power users—those who spend the most time online, connect via mobile and are seen as innovators—are more likely to communicate through a variety of Web channels, and less likely than average Hispanics to use e-mail or talk over the phone and in person. About nine in 10 power users share deals and entertainment info with their friends, and many are content creators.

Marketers’ assumptions about the importance of Hispanics’ acculturation levels may be wrong, according to the survey. There was very little difference in the habits of Hispanic-dominant, bicultural and US-dominant users—except that Hispanic-dominant respondents were more likely to be early adopters.

Go to www.emarketer.com for graphics

Permalink Leave a Comment

The Balancing Act Between Consumer Saving Desire and Redemption in Todays Economy

February 8, 2010 at 9:45 am (News)

by Erin O’Connell 
http://www.nchmarketing.com

During the onset of a recession, it is natural that consumers would increasingly look for ways to save money. As such, consumer interest in coupon savings increases – just as we have seen and reported in The Coupon Sentinel this year. But, surprisingly, there is a segment of consumers (11%) who report that they are actually using fewer coupons. Why would that be?

We wanted to know what might cause the seemingly illogical behavior of reducing coupon use at a time when most consumers are increasing their efforts to save money. So, we asked those in our survey who had indicated a decline in coupon use compared to the prior year to specify the main reason for their change in behavior.

The majority (49.3%) indicated reasons that were tied directly to the products being promoted (or not promoted, as it were). For example, the most popular reason cited for using fewer coupons was that consumers could not find coupons for the products they wanted to buy (36.2%). Further, more than 13% of these consumers reported that they did not need or use the products that were being discounted via coupons.

These findings suggest marketers may be missing an opportunity due to a lack of relevant coupon offers. While every consumer won’t find every promoted product of interest, a greater concern is the unmet demand for coupon savings on products desired. Absent a coupon, consumers may be more likely to try a different brand that is actively reaching consumers with promotions, or switch to a private label product to meet their needs.

Other reasons consumers provided for using fewer coupons indicate some dissatisfaction with the coupon offers that marketers have made available:

  • 11.3% of consumers who said they were using fewer coupons reported the cause as “offer expiration before they have a chance to redeem.”
  • 9.5% reported that they are using fewer coupons because the savings are not significant.
  • 7% of the consumers said they were required to buy too much to get the savings. (During difficult economic times, when consumers may be less inclined to stock up on products and buy only what is needed at the moment, they may view multiple purchase requirements negatively). 

In light of the current recession, it is surprising to find 11% of consumers, many of whom consider themselves promotion sensitive, using fewer coupons. And the reason for this lack of use seems to be directly linked to choices marketers have made – choices about whether or not to promote their product with a coupon and choices about how attractive those offers would be to induce usage.

Some marketers may be “gun shy” or fearful that an overly eager-to-save shopping community will drive up their redemption costs. But such concerns seem short-sighted compared to concerns about losing this segment of shoppers altogether to other brands and private labels that are perceived as offering a low price. 

The good news is that coupon marketers have the ability to reach out to consumers with more valuable, targeted coupons promotions, and in more formats than ever before. And consumers will be receptive when the coupons are convenient to use and provide ample time to use them. Consumers have made it clear that they want the opportunity to save money. By investing in more attractive coupon offers, marketers may be able to more effectively retain their market share during these difficult times and place themselves in a better position for growth when the recession ends. 

Editor’s Note: Data throughout this article refers to an internet survey of 1,000 consumers that was commissioned by NCH at the onset of the recession in August 2008.

Permalink Leave a Comment

Retailers, Wholesalers Spending More on Tech: SN Survey

February 8, 2010 at 8:19 am (News)

Feb 8, 2010 6:00 AM, By MICHAEL GARRY

As the economy begins to pull out of the recession, food retailers and wholesalers are showing a greater propensity to spend on technology, according to SN’s annual technology survey conducted last month.

The online survey of food retail and wholesale subscribers to SN and the SN daily newsletter, which forms the basis of this16th annual State of the Industry Report on Supermarket Technology, indicates that more than half (54.4%) of the respondents plan to increase their IT budgets this year by up to 10%, and 62% overall expect to spend more on IT. That represents an uptick from last year’s survey, when about one-third (34%) said their IT budget would grow up to 10%, and 49% overall said it would increase.

The survey results also demonstrated the impact the recession had on IT spending last year. Almost half of respondents (46.8%) said they had undertaken moderate cutbacks in IT spending because of the recession. And a larger percentage of respondents (43%) said their 2009 budgets were 1% of sales or less than stated that last year (34%).

www.supermarketnews.com

Permalink Leave a Comment

2009 in Review: Economy Drives Consumer Demand for Coupon Savings

February 5, 2010 at 9:40 am (News)

By Donna Stepanek 
http://www.nchmarketing.com
 

Perhaps the most followed story of 2009 involved continuing economic woes and their ongoing effect on consumer attitudes and shopping behaviors.

Throughout much of 2008 and 2009, the U.S. economy continued to contract, according to figures from the Bureau of Economic Analysis. In addition, the U.S. unemployment rate continued to rise until it finally hit its highest level since World War II – more than 10% – according to the Bureau of Labor Statistics. In light of the severity of the situation, experts have referred to the economic downturn as the “Great Recession,” being that it is the worst recession experienced in the U.S. since the Great Depression.

There has already been much belt-tightening during the current economic downturn, and experts are predicting that these changes in attitudes and behaviors could last for years to come. NCH’s 2009 Consumer Survey reveals that more than 80% of consumers now consider themselves price-conscious or promotion-sensitive – an increase of four percentage points over the prior year and an increase of more than 23 percentage points since 2000.

Frugal consumers are looking for ways to save money. Money-saving strategies include stocking up on products that are on sale, purchasing more store brands, shopping at different retail channels and, of course, using more coupons.

After an increase of more than five percentage points from 2007 to 2008, the percentage of consumers who reported using coupons remained at 94% in 2009. The percentage of consumers who reported using coupons regularly in 2009 also remained high after an increase of more than 12 percentage points from 2007 to 2008. The categories of coupon use that increased the most during the current years of recession were the “often” and “sometimes” frequencies, and considerably fewer consumers said they “rarely” or “never” use coupons.

Also, as consumers have become more cautious about how they spend their money, many are planning their shopping trips at home, as opposed to making purchasing decisions in the store. As a result, there has been a resurgence in the use of shopping lists, and a majority of shoppers say they are using coupons and store ads to help them plan what goes on their lists.

To meet increased consumer demand for coupons, marketers have made more coupons available. Total year-to-date distribution as of the third quarter of 2009 was up 11% compared to the same period in the prior year. To ensure that these offers are sufficiently attractive to entice today’s budget-conscious consumers, marketers have increased the average face value of their coupons by 12¢ since the third quarter of 2008 to $1.43.

With more coupons being distributed more frequently, some marketers have been able to scale back the expiration periods on their offers (average of 10.8 weeks as of Q3 2009). This has enabled them to limit their long-term financial liability for individual offers while motivating more immediate action by consumers. For marketers who are unable to promote as frequently, however, it may still be more effective to have longer expiration periods for the fewer number of coupons that are being made available.

Consumers have responded positively to the increased availability of these more attractive offers. Total redemption grew 23% from the third quarter of 2008 to the third quarter of 2009. Redemption increased across nearly every retail channel but grew most dramatically in the “All Other” category (+34%), which includes Dollar Stores, and in the “Mass Merchandiser” category (+30%) as consumers shopped with coupons where they perceived prices to be lowest. As a result, consumers managed to save nearly $600 million more during the first three quarters of 2009 than they did during the same period in 2008.

Looking ahead at 2010, it appears that consumer demand for coupons will likely remain strong. A number of experts are predicting that the unemployment rate will remain above 10% throughout much of the coming year, which will significantly slow the road to economic recovery. And, with a segment of the population being profoundly affected by the recession, it is expected that consumers who have permanently changed their shopping habits will continue to seek out coupon savings long after the economy rebounds. Nearly three-fourths of those who indicated that they are more careful about remembering to bring coupons to the store or are clipping more coupons than before expect to continue with these behaviors.

In light of these profound and lasting changes in consumer attitudes and behaviors, coupons will continue to play a critical role in the marketing mix for the foreseeable future. But, if marketers don’t make relevant coupon offers available to consumers when they are ready to make their purchase decisions, then consumers may be more inclined to purchase a competing brand with a coupon or purchase a store brand to save money.

Permalink Leave a Comment

COUPON DISTRIBUTION INCREASED 12% AND REDEMPTION INCREASED BY 19% IN THE FIRST HALF OF 2009

February 4, 2010 at 10:43 pm (News)

NCH Marketing Services reported that Consumer Product Good marketers are taking action to the down economy by increasing coupons distributed in the first half of 2009 totaling 158 billion coupons. Coupons distributed during the first half of 2009 increased 12% while the number of coupons redeemed increased 19%. CPG marketers have progressively increased coupon distribution by 23% over the last five quarters. The distribution of HBC product coupons increased 10.4% while the distribution of grocery products increased 12.9% for the first half of 2009.

CPG marketers continue to allocate the majority of their promotional budget for coupon distribution in 2009 to FSI’s (86.2%) followed by Handouts (5%), Direct Mail (3.0%), Magazines (2.6%), In/On Pack & Cross Ruff (1.5%), Newspaper (0.8%), Internet (0.7%) Military (0.1%) and Others (0.1%). Marketers are controlling redemption liability with shorter durations. Multiple purchase coupons decreased from 28% in 2008 to 24% in 2009 while the average coupon duration decreased from 11.2 weeks in the first half of 2008 to 10.9 week for the first half of 2009.

The average face value offered decreased from $1.42 in the first half of 2008 to $1.37 for the first half of 2009; however it is an increase over the $1.29 average over the full year 2008. CPG coupon redemption volume has increased gradually over the last four quarters by 33% as 1.575 billion coupons were redeemed in the first half of 2009. CPG coupon redemption volume increased in all key retail segments led by mass merchandisers (including Supercenters) (30.2%), Grocery stores (16.7%), Drug stores (15.7%) while decreasing at Military Commissaries (8.1%) in the first half of 2009. The average coupon redemption rate for Consumer Product Goods increased by 21.4% on Instant on Pack coupons followed by Internet coupons (16.61%), Electronically dispensed (10.48%), Direct mail (3.80%) and FSI’s (1.05%) for the first half of 2009.

Source: NCH Marketing Services, Inc., Mid-Year 2009 Coupon Facts Report

Permalink Leave a Comment

Next page »