Right Media Mix Can Satisfy Consumer Demand for Savings          

By Jack Grant

It takes “a bit of art and data science” for CPG marketers to build an appropriate coupon strategy, says Charlie Brown, Vice President of Marketing, NCH Marketing Services. “Companies that strike the right balance of print and digital media can expect improved results in a transforming CPG environment.”

That was one take-away from the NCH’s Year-End 2017 Coupon Trends Analysis for Consumer Packaged Goods (CPG). NCH is a subsidiary of Valassis, which aims to activate consumers through intelligent media delivery.

At a time when marketers are striving to continually optimize and improve results, overall CPG coupon redemption declined in 2017.

Findings from the NCH report reveal that consumers achieved $3.1 billion in savings over the last year, with the average face value of coupons available increasing to $1.95. However, CPG marketers missed an opportunity to capture additional consumer redemption, due to shifts in coupon media allocation.

Catering to consumers’ increasing digital use, CPG marketers drove a 27 percent increase in overall digital distribution. While this contributed to an additional 47 percent in paperless coupon redemption, it was less than 12 share points of total 2017 redemption, and insufficient in scale to replace volume shifted from marketers’ other coupon strategies.

“The challenge of delivering the right coupon media mix is not new to CPG marketers, but it is now compounded by a changing retailer landscape, shifting consumer product preferences and value-seeking shopping behaviors across the path to purchase,” said Brown.

Additional key findings from the analysis reveal:

  • Free Standing Insert (FSI) remains the predominant vehicle to reach consumers.
  • FSIs represented 93.7 percent of coupon distribution volume and was the top media format for redemption volume as well.
  • The average number of CPG coupons per FSI page increased 5 percent to 2.1 in 2017, per Kantar Media. NCH’s analysis finds coupons appearing alone on an FSI page generate 17 percent more redemption volume, on average, compared to coupons that share an FSI page with other coupons.
  • $573 billion was available in savings incentives to consumers in 2017.
  • Nearly 61 percent of consumers are influenced by coupons on their grocery purchases (according to Prosper Insights & Analytics, January 2017).
  • An increasing amount of savings is offered in non-food categories.
  • Nearly 70 percent of all CPG coupon distribution was in non-food categories, such as over-the-counter health care products and household goods.

Prior Valassis research based on consumer behavior and preferences indicates that shoppers want to receive savings in both print and digital formats. According to the 2K17 Valassis Coupon Intelligence Report, mail ranks as the most preferred way to obtain coupons, while smartphones/mobile devices recorded the greatest increase.

Overall, the report found that coupon use is holding steady with 90 percent of consumers obtaining them from a variety of online and offline sources. This finding is consistent across audiences, including various generations and demographic segments, such as millennials, multicultural consumers and parents.

Among coupon users, approximately 30 percent have increased their use of paper coupons (either from the mail or newspaper coupon book) and 36 percent have increased their use of paperless discounts (discounts received on a smartphone/mobile device and/or downloaded onto a store ID/loyalty card), further supporting coupon use from a multitude of sources. 

                                               Early March 2018