What Is Really Happening Today?

By Susan Maurer

There have been various articles and reports noting some fluctuating coupon trends, depending on whether you are talking about print or digital coupons. Some emphasize the continued scale of print, while others tout the growth of load to card. So where should the focus really be? To find the real story, let’s reflect – not on the ups and downs of couponing, but on the strategy and mindset behind these trends.

Coupons have been able to ride the wave of consumerism and commercial evolution for over 100 years, often decreasing with a good economy and increasing during economically challenging times. As the long game goes, they have had a respectable track record.  In 2017, a whopping 293 billion print and digital coupons were distributed, which amounts to shoppers saving over $3 billion (1), thanks to marketers who understand the coupon’s role of attracting new users and activating purchase. Marketers may also like the ease of measurement and accountability that a coupon delivers: one coupon redeemed equals (at least) one unit moved. What other media offers such direct attribution?

Consumers are benefiting from the marketer’s choice to deliver coupon savings, yet despite an improving economy, they are still telling us they value coupons. Research shows that 55 percent of households think their financial health is good (2), but 45 percent of consumers are still using coupons always or very often (3). Even 50 percent of discerning millennials use coupons always or very often, an increase of nine points versus 2016.

The dilemma, however, is that coupons are becoming harder to find. At least 58 percent of consumers have said that they can’t find coupons for the products that they want to buy anymore (both print and digital) (3). So, why are the coupons disappearing? For the answer, consider the shifts that marketers have taken in the name of media optimization.

Marketers have pulled back on coupon distribution over the last few years in an effort to optimize their coupon media mix with an accelerated shift into digital, while also managing tighter budgets. That has sometimes translated to eliminating coupons altogether or reducing traditional coupon distribution vehicles to fund newer options that offer unique benefits. These newer options, by design, bring less scale, leaving a gap in consumers who were reached or activated to purchase products (1). This means that, in many cases, marketers are jeopardizing volume when fewer coupons are delivered.

For example, client case studies have shown that when traditional free-standing insert coupon distribution is significantly reduced, brand volume declines an average of 17 percent and household penetration also suffers (4). That’s a true loss for a brand and creates friction for consumers who – as 50 percent have declared –feel better about a company when that company offers coupons (3).

As if the risk of volume loss wasn’t enough, the influx of private label brands also adds pressure to the consumer packaged goods promotion game.  As private label brands close in on national brand quality, there is a growing disparity between store brand and national retail prices. But that’s all the more reason for national CPG brands to close the price value gap and offer coupons to better compete and stem what has been called “anemic” CPG sales growth (2)
It is time put the focus back where it began, with the consumer, who is sending us some clear signals about her desire for savings yet her inability to find coupons. Understanding consumer expectations and behavior is a sure way to find the sales.

Let’s not forget that a coupon is a coupon – print or digital –  and when we detach the coupon from its distribution vehicle, we can more clearly see the benefits that a few dollars and cents bring to the American consumer. And as new tariffs take effect, inevitably passing some costs through to the consumer, there will most likely be a growing and continued demand for coupons. It’s up to marketers to tap into the wealth of available data to not only reach but also activate consumers wherever they are, using the right media mix.

The evolution continues but two things remain constant: the consumer desires savings and the unwavering coupon’s ability to deliver them.

(1) NCH 2017 Full Year Coupon Facts
(2) IRI Consumer Connect Mid-Year Reflection 2018: Where’s the Non-Food Growth?  July 2018
(3) Valassis Coupon Intelligence Report, 2K18
(4) Valassis /NCH, based on a summary of 4 client case studies

Susan Maurer is a Client Marketing Director at Valassis. For more information, www.valassis.com.

                                               Early January 2019
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