What’s the Forecast for Coupons in 2019?
By John Karolefski
Another year unfolds with a variety of questions about couponing. Brands and their retail partners want answers so they can plan their promotional strategies.
Will distribution and redemption of FSIs continue to decline or stay steady? Will digital coupons continue to gain acceptance by shoppers? What will be fate of print-at-home coupons? Will real-time coupon validation reduce fraud?
“Targeting shoppers with a mix of promotional vehicles is the best strategy for most brands to ensure they reach a broad base of their consumers,” said Susan Jones, Senior Director, CPG Solutions, Inmar.
Here is what Jones and other coupon experts see when they peer into their crystal ball:
It’s a given that consumers will plan their shopping with coupons and be responsive to incentives in 2019, perhaps even more so if price inflation, tariffs, investment returns or other factors erode their confidence. So, it will be critical that marketers leverage the analytics available to optimize the right quantity and mix of direct-to-consumer print and digital coupon offers that will achieve improved activation across all retail channels and all consumer audiences. Thus, I predict that CPG marketers will better measure and evaluate their redemption results in 2019 to ensure brands and retailers obtain the sales lift, new user trial and increased market share benefits that well-executed coupon campaigns deliver.
Charlie Brown, Vice President of Marketing, NCH Marketing Services
We anticipate that there will be continued optimization and evolution in the coupon industry in 2019 – following trends in 2018. Inmar will be reporting decreases for both overall coupon distribution and redemption in the Promotion Industry Analysis for 2018. While the Free-Standing Insert (FSI) volume numbers are down, FSI continued to dominate the share of coupon distribution, but only represented roughly a third of overall redemption. Similarly, print-at-home coupons are also declining in both distribution and redemption. We anticipate that these methods will continue to decline in 2019.
As marketers shift from traditional paper to digital coupons, we see increases in both digital distribution and redemption across food and non-food manufacturers. We expect for digital coupon usage to continue growing at a fast pace in 2019 and beyond.
Coupons are impactful on shopper behavior and continue to be actively sought out.
Susan Jones, Senior Director, CPG Solutions, Inmar
I see a continued growth with digital coupons in 2019; however, traditional coupons will still play an important role for many manufacturers.
Redemption Processing Representatives (RPR) has been processing traditional coupons for retailer clients since 2012. Our clients are primarily independents, but we also have several chains. In 2016, we started processing digital coupons for Sprouts Farmers Market and have seen continuous growth while the traditional volume has declined. Digital coupons attract manufacturers that have never couponed because they can control the distribution by only offering to specific retailers. Other benefits of digital vs. traditional are: faster redemption data, fewer adjustments and redemption at store level.
As with traditional paper coupons, digital is are also governed by voluntary, recommended guidelines; however, there may be differences between digital vendors and retailers. Both the Association of Coupon Professionals (ACP) and the Joint Industry Coupon Committee (JICC) continue to review and update the recommended guidelines.
Ron Fischer, President, Redemption Processing Representatives.
Intelligent Clearing Network’s transaction data reveal historically underestimated risks related to coupon fraud and mis-use of both paper and digital promotional offers. Lack of real-time validation continues to allow increased counterfeit acceptance in retail outlets, causing denial of payment to retailers for discounts given at the POS, and creating unwanted disputes between trading partners due to the denials.
Our research has shown that the fabrication of high-value fraudulent paper and digital coupons will continue to increase in the coming year. ICN also forecasts:
- Real-time positive coupon files will continue to be used by an increasing number of retailers in the coming year and that the risk of fraud will be significantly reduced in ICN locations.
- Manufacturers will continue to see cost per coupon rise in the existing paper settlement process and their willingness to consider alternative settlement processes will grow.
- Manufacturers will push for more retailers to utilize real time promotion validation
- Fraudsters will continue to target stores not fully validating
- Retailers will show more willingness to provide product data tied to promotion acceptance
- Retailers will push for more in-store efficiencies relating to paper promotions and stop accepting payment 30 or more days past the time the promotion has been accepted in stores as the norm.
- Retailers and manufacturers alike will reject attempts to pay faster without eliminating adjustments.
ICN identifies counterfeit at the POS in real-time and provides an electronic validation service. The detailed electronic record is able to eliminate settlement disputes and delayed payments between retailers and manufacturers.
Beth Buresh, President, Intelligent Clearing Network