Printed Store Circular Lingers as Source of In-Ad Coupons         

By John Karolefski

Reports of the death of the printed store circular are greatly exaggerated.

While the digital circular is available more and more, its place as a permanent replacement for paper is only emerging. Old shopping habits are proving hard to change. And that’s good news for in-ad coupons – for now.

The latest evidence:

  • According to a 2017 Nielsen Homescan study, about 80 percent of U.S. households still use circulars and other traditional, printed sources for product information.

  • The 2017 Valassis Coupon Intelligence Report said 81 percent of shoppers search for deals in store circulars while in the store.

The status of paper circulars and their in-ad coupons was analyzed last year in an advertising and  promotion practices report from dunnhumby, the research company, and Aptaris, a provider of enterprise marketing and promotions management technology. They polled the owners of more than 4,600 grocery stores across 34 states and found that about four in 10 retailers include coupons in their paper circulars. But a quarter of them predict they’ll offer fewer in-ad coupons in the future.

“Retailer circulars are effective for both retailers and the featured CPG products within,” said Curtis Tingle, CMO of Valassis. “However, we’re seeing the in-ad coupon itself migrate to retailers’ Coupon 2 Card programs (digital paperless coupons). The circular continues to advertise the promoted brands, and often with a price net of the digital coupon, enabling shoppers to plan their purchases via the circular and encourage engagement with the retailer online to download the brand’s offer.”

NCH Marketing, a Valassis subsidiary, found that digital paperless coupons grew to near 12 percent of all CPG coupons redeemed in 2017. Digital distribution of coupons started nearly two decades ago, yet print distribution still represents over 98% of total coupon distribution.

“We are seeing a faster pace-of-change in consumer behavior,” Tingle said. “Truly digital coupons – that is, paperless coupons that don’t require consumers to print at home – represent nearly 10% of all redemption, up 40% YOY. The only other medium that had redemption volume growth in the first-half of 2017 was direct mail, where marketers can take advantage of being more relevant through personalization to consumers.”

He said consumer activation via retail circular in-ad coupons has never been a big tactic for marketers. “While many circulars do in fact have a coupon, our internal data tells us that a very small percentage of coupon distribution and redemption comes from this vehicle.”

What will drive change, Tingle said, is “seamless integrated shopping experiences.” In other words, where consumers can find coupons in print or digital media and activate the savings on their mobile device, in-store or online.

“Millennials are actually the only generation that increased their use of coupons last year driven by the fact that they are a generation of consumers who grew up during the Great Recession,” he said. “They increased their use of more print and digital coupons. While the fastest growing source of coupons and discounts was via mobile device, the most preferred source of receiving coupons was via the mail.” 

Many promotion analysts believe that the best strategy going forward is using a combination of marketing tactics; that is, maintain and optimize spending on traditional printed circulars with coupons while developing digital circulars and coupons.

Tingle agrees. “There are no longer ‘walls’ when it comes to retail,” he said. “Digital and brick-and-mortar commerce must co-exist, and this really should be no different when it comes to implementing a holistic marketing strategy that activates shoppers along their path to purchase. Today’s consumers are looking for personalized, timely messages, discounts and offers through a combination of traditional and digital media channels, which enable them to shop online and in-store.”

                                               Early February 2018