Bold Coupon Predictions for 2020 Reveal Diversity of Opinions
By Jack Grant
What will be the future of coupons in 2020?
“The often-predicted death of FSI coupons will once again prove to be an exaggeration,” stated Bud Miller, Executive Director, Coupon Information Center (CIC).
Not everybody agrees.
“We expect, over the course of 2020, promotion dollars spent in the freestanding insert to significantly decline as large CPGs plan to shift out of the FSI completely,” said Steven Boal, CEO of Quotient Technology in Progressive Grocer, a major national trade publication.
Predictions about the future of FSIs may differ, as do other opinions about the future of coupons in terms of type, delivery, creativity, security and consumer acceptance. CPGmatters polled leaders of the coupon industry to gather their thoughts, as follows:
There are two ways for CPG companies to win in 2020, and that’s by stealing share from competitors or through product innovation. In both cases savvy marketers will use predictive intelligence to spark action with early adapters and price sensitive consumers.
According to the 2019 Kantar Study, “The Future of How People Shop”, 65% of consumers say they “always choose the same brand or products”, thus leaving the battle for share in the hands of the remaining 35% of consumers. The study also shows coupons are a big draw for the influence-able consumer. For example, 25% of consumers reviewed coupons / promotions prior to purchasing skin care products and 30% prior to purchasing cleaning products. With coupons continuing to be a key driver for sales lift and trial, we predict 2020 coupon distribution will be fine-tuned based on buying triggers, content consumption, promotional / coupon sensitivity and store visitation. – Dana Baggett, Executive Director, Valassis Vertical Marketing
As marketers are under increased pressure to deliver measurable results with their marketing spend, the industry will continue to see significant growth in methods that deliver attributable sales. Digital coupons will continue to grow in usage by manufacturers and retailers alike given the method’s ability to deliver precise targeting, tight control over budget parameters and measurable ROI. As the economy continues to see record low unemployment rates, shoppers will be less willing to “work” to find coupon savings, making optimized value tactics and targeted delivery of coupons across the shopper journey critical. As retailers are under increased competitive threats, we expect to see them expand their efforts and focus on loyalty programs and the integration of their loyalty and digital coupon programs with media capabilities and e-Commerce solutions in order to deliver differentiated experiences for shoppers and increased attributable marketing opportunities for CPGs. – Kris Beutel, Director of Product Marketing, Inmar
Real-time positive file participation and validation will continue to increase. Alternate, more efficient promotion reimbursement methods will continue to be tested and used. Paper coupon promotions will continue to see fraudulent activity with a moderate rise noted in digital/mobile promotion fraud. Paper redemptions will show a slight uptick in the total number of coupons redeemed. Growth of digital distribution and redemption will slow. – Beth Buresh, President, Intelligent Clearing Network (ICN)
Brands are extending their ‘purpose’ platforms to the couponing arena. This is particularly true with environmental and gender-equity messaging. You don’t always think of FSIs as being media for those messages, but we’ve actually noticed that brands have been utilizing the creative [in FSIs] to tie into those messages. We’ve been seeing environmental message in FSI creatives including callouts for when products use recycled materials, or when brands are utilizing ethical ingredient sourcing or developing new packaging that is 100 percent recyclable, for example.
This isn’t just true for existing national brands, but also, for example, new health and beauty brands that market themselves as ‘natural.’”
And when it comes to gender, we’ve seen a lot of programs that are for charities or donations in [areas such as] the role of education and self-esteem, and even brand support for International Women’s Day. This is messaging you typically wouldn’t think of being in creative support of coupons. -- Samantha Demko, Custom Solutions Analyst, Kantar
2020 will see fraudulent coupon activity continuing to expand. Some of our clients have seen increases of over 50% from the previous year. We will see additional software functionality to assist the cashier in real time to catch and stop the fraudulent coupons from being accepted. Fraudsters will continue to develop new techniques to quickly change the coupon values and codes, making increasingly difficult to catch the fraud at the point of sale. Positive offer validation will continue to be used by both retailers and manufacturers. The positive file validation has reduced the fraudulent coupon activity some 80% for one of ICN’s clients. – Jon Robertson, Vice President of Marketing, Intelligent Clearing Network (ICN)
Redemption Processing Representatives, Inc. (RPR) is very optimistic our volume will continue to rise in 2020. In 2019, we experienced a slight increase in traditional volume due to our increase of independent retailers. Digital volume had a significant increase with our client Sprouts Farmers Market, and we are working with Invisipon bringing other digital clients aboard this year. RPR has been awarded the special processing of National Co-Op Grocers Booklet coupons which are similar to traditional, but have a different processing channel. We are also very excited to be working with The Coupon Bureau as they lead the coupon industry to many improvements. – Ron Fischer, President, Redemption Processing Representatives
Efforts to enhance audit trails and to obtain valid metrics for digital promotions will increase. The much-anticipated positive file experiments will come closer to broad scale implementation. Sophisticated promotion professionals will take a closer look at Internet- enabled and digital promotions to determine if they are effectively building brands. The need for retailers using digital promotions to enhance their loss prevention controls will become apparent. – Bud Miller, Executive Director, Coupon Information Center (CIC)
QR codes are really important to help customers more easily tie into the offer. We have identified the use of QR codes as getting people closer to interacting with brands … In the United States we are now seeing a lot more [such] activities, such as shoppable ads on TV from NBC Universal.
So far there are just a handful of QR codes in coupon industry. But our team has noticed this as an emerging trend. We think it’s going to continue in 2020.
Brands are doing a number of things now with QR codes, such as helping consumers tie to their offers directly to a coupon web page and sending consumers more of an interactive web page where they can try out different things, such as a style for hair care.
I was a fan of QR codes when they came out years ago. Then there was a lull. But there’s more use of QR codes now. – Darcy Douglas, Director of Account Solutions, Kantar