Latest Trends Provide Clues
About New Shopping Behavior
By John Karolefski
Today’s “new normal” shopping behavior is revealed in analysis of the latest coupon distribution and usage trends.
The research by Valassis provides greater insight into consumer savings habits with coupons – what they are buying, where they are shopping and how the economy is defining a new “normal” when it comes to shopping behavior.
“Consumers really have a savings mindset now. I think that is a permanent shift in their behavior,” said Suzie Brown, chief marketing officer for Valassis, a leading media and marketing services company.
Current economic conditions are leading 94% of those surveyed to use consumer packaged good (CPG) coupons at least once in the past year, and 77% with regularity.
Consumers redeemed 23% more coupons in 2009 than the prior year – the second-highest increase in year-over-year redemption volume ever recorded, bringing the total number of coupons redeemed to 3.2 billion. As a result, consumers saved nearly $3.5 billion with coupons, an increase of $800 million (nearly 30%) over the prior year.
These findings were revealed as part of the 2010 NCH Coupon Facts Report recently released by NCH Marketing Services, a Valassis company.
The percentage of consumers planning their shopping lists with CPG coupons is up significantly during recessionary times. In 2009, 88% matched their shopping lists with coupons compared to 78% in 2007. Shopping behavior with coupons has changed and new habits will be maintained in the future even as consumers’ personal economic situations improve, according to responses to four questions posed in the NCH Consumer Survey:
- 31% are more careful about remembering to bring coupons to the store – 74% expect this behavior to continue
- 25% are clipping more coupons than before – 72% expect this habit to continue
- 6% are clipping coupons, which they never did before – 58% expect to continue clipping coupons in the future
- 3% have joined coupon clubs or attended meetings about coupons – 50% expect to be involved in such activities in the future.
“With consumers’ strong focus on value and a greater reliance on research and planning, these upward trends point to a permanent change in the mindset of today’s deal-seeking shopper,” said Brown. “Tomorrow’s shopper will be just as savvy. The new findings also reinforce the fact that consumers won’t part as easily with their hard-earned money without pairing it with a deal in print or digitally.”
She elaborated that people will open their wallets to spend money, but what they’re looking for is the best value they can get.
“In the last couple of years, consumers have been more focused on ‘needs’ versus ‘wants,’” she said. “When they get into the ‘want’ category, they want to have a deal that would generate the best value for the purchase. We feel very pleased that we’re able to bring the greatest amount of deals and offers and values to consumers so that they can make the best possible shopping decisions.”
Coupon redemption grew each quarter in 2009:
- Redemption for grocery products increased by 25%, representing 2 billion coupons
- Redemption of health and beauty care (HBC) products increased by 20%, representing 1.2 billion coupons.
Marketers issued more high-valued coupons in 2009, and 74% of them required the purchase of only one item to receive the discount. The average face value of a CPG coupon increased 6% in 2009 to $1.37. More specifically:
- The average face value of a HBC coupon in 2009 increased to $1.82
- 86% of HBC coupons issued in 2009 had face values of more than 75 cents
- The average face value of a grocery coupon in 2009 increased to $1.16
- 67% of grocery coupons issued in 2009 had face values greater than 75 cents.
Likewise, coupon distribution increased in record proportion in 2009 with 311 billion coupons in the marketplace, representing an 11% increase by CPG manufacturers. Grocery coupons accounted for 64% of the CPG coupons issued in 2009.
“As CPG marketers faced the pressure of maintaining sales and fending off private label competition in the midst of the worst recession since the Great Depression, they strategically increased their use of coupon promotions in 2009 across all major forms of coupon media,” said Charlie Brown, NCH Vice President of Marketing.
CPG marketers continued to allocate the largest share of coupons to the cooperative free-standing insert (FSI) coupon booklet, accounting for 86% of CPG coupon distribution in 2009. While the Internet represented 1% of CPG coupon distribution in 2009 – up 50% from 2008 – the redemption share was nearly 10%.
“Internet coupon distribution remains a small portion of the total CPG coupon media market, but it is growing faster than any other medium,” Charlie Brown said. “As redemption rates of online coupons increase as well, these trends indicate that CPG marketers are using the Internet more and more to reach consumers with coupons, and consumers, especially in current economic times, are responding at an increasing pace.”
In 2009, redplum.com, a leading savings and lifestyle site, issued an estimated 194 million coupons. The RedPlum Network, with nearly 1,000 affiliate sites, is the fastest growing
coupon network.
“Our RedPlum portfolio is well positioned to continue delivering the savings that consumers desire in a variety of ways – in the mail, newspaper, digitally and in-store,” said Suzie Brown.
Validation/Clearing Solutions Highlight
Exhibits at Industry Coupon Conference
By Jack Grant
Solutions are needed to combat the mis/malredemption and fraud associated with paper coupons. These persistent problems continue to create financial hardship for manufacturers, retailers, media partners, as well as retailer clearing houses and manufacturer agents.
Some of these solutions were among several others on display last month in Las Vegas at the annual Industry Coupon Conference hosted by the Association of Coupon Professionals (ACP) in collaboration with other industry groups.
“The exhibits gave manufacturers and retailers the chance to learn about the latest technology and solutions that improve couponing,” said John Morgan, executive director of ACP.
For example, the Intelligent Clearing Network (ICN) introduced a solution that electronically validates and clears coupons and other incentives at the point of sale (POS) in grocery, drug, and mass merchant retailers. By replacing today’s manual, convoluted, and fraud-prone process, ICN’s clearing network provides manufacturers, media companies, and retailers with true “real time” redemption information the moment the incentive clears the retailer’s POS system.
“Solving the problem at the POS is the most effective way of addressing the problem,” Rich Thibedeau, ICN’s Executive Vice President of Operations told CPGmatters in the exhibit area. He said the company’s single connection to a retailer’s POS also provides a very elegant digital solution which eliminates the need for downloading and uploading files to the POS.
By implementing a validation service for processing paper coupons at the POS, he explained, the industry can potentially save up to hundreds of millions of dollars every year. Manufacturers and retailers will see direct improvements to their bottom lines.
Meanwhile, the growth of digital coupons is placing a strain on retailers’ POS systems. As the popularity of digital coupons continues to grow, explained Thibedeau, ICN’s software has the ability to take the strain off the retailer’s POS systems and eliminates the need for downloading and uploading files to the POS. The more media programs the retailer adds the more complicated the POS processing becomes.
The bottom line: ICN provides a single connection to the retailer’s POS which can serve the needs of both paper and digital coupon validation and clearing.
Meanwhile, executives from Cunningham Electronics Corporation were on hand to explain their Electronic Coupon Redemption System (ECRS). The company says that for less than
3 cents of the 8 cents that is paid by manufacturers for coupon redemption, “we can provide the average retailer with a customer service that eliminates the millions of dollars wasted in redeeming coupons that are not properly verified and validated.”
The company listed the following benefits of its ECRS:
- An audit trail to provide proof of purchase for both paper and electronic coupons
- Elimination of altered or counterfeit coupon redemption – no more chargebacks
- Weekly payment for coupons redeemed the previous week.
- Elimination of shipping coupons and associated costs for both retailers and manufacturers.
- Full and accurate validation of each coupon regardless of the barcode used (UPC or GS1).
- Both retailers and manufacturers receive the transaction records for verification of coupons processed each week.
ProLogic Redemption Solutions presented itself as “the retailer’s advocate on coupon clearing and processing.” The company aims to help retailers and wholesalers recover expenses associated with their coupon programs. Specifically, this means:
- Accurate counting and sorting
- Reimbursements for shipping and handling expenses
- Clearing for both paper and digital coupons
- Pharmacy receivables management services.
Document Security Systems (DSS) provides security printing and anti-counterfeiting technologies. By combining a patented suite of AuthentiGuard security printing techniques with industry recognized features, and a strict set of security-focused standard operating procedures, DSS aims to ensure maximum mitigation of risk for valuable print programs.
The company says it has printed millions of coupons for the world’s most recognized consumer product companies – without any report of fraud. Its layered technology approach is designed to ensure maximum protection against copying and scanning, and “irrefutable authentication upon redemption.”
Totally focused on “shopper marketing,” Meyers is the preferred company of some of the world’s most prestigious brands for retail signage, in-pack and on-pack promotional vehicles and for high-security products.
The company says that its approach to coupon fraud is used by the most influential brands in the world. A combination of overt and covert printing processes in addition to CIC protocols is designed to allow Meyers to offer high-security coupons.
NPC provides customized print and electronic document solutions for customers. Its ConfiDoc solution was developed for customer care, rewards programs, and high-value offers. This integrated coupon and letter is the deliverable of a broader coupon solution build to cost effectively secure high value and free product coupons as well as create opportunities to enhance consumer interaction.
Pinpoint Data, provider of barcoding and family code management for the promotions industry, exhibited its site of tools for manufacturers to produce, validate and communicate barcodes and associated data sets to the marketplace. CouponChek and ProductChek are online barcode content validation tools. The Barcode Wizard incorporates protections into an online wizard interface that instantly creates properly coded barcodes. FamilyCode Manager and Product Data Dispatcher products maintain and electronically distribute family code information to retailers.
APRIL 2010
What Are the Latest Trends, Best Practices?
By Jack Grant
When the economy soured, coupons became more viable to consumers. The result is that distribution and redemption have increased by double digits.
“Obviously, there’s a lot going on with coupons that manufacturers and retailers need to stay abreast of,” said John Morgan, executive director of the Association of Coupon Professionals (ACP). “In particular, digital coupon programs require collaboration with trading partners
and vendors.”
Executives with a stake in coupons will learn the latest trends and best practices later
this month at the annual Industry Coupon Conference. The only event in 2010 dedicated exclusively to coupons will take place April 27-29 at The Venetian & Palazzo, a five-star resort in Las Vegas.
“This is an ideal opportunity to come and meet the leaders of the industry,” said Morgan.
“There’s a buzz going on in all forms of coupons: traditional, Internet print-at-home, and digital. And they will all be covered at the conference.”
New speakers have been added to the agenda. They include:
- Stanley Wadford of Winn-Dixie, Michelle Jones of Key Food, Heidi Happy from BJ’s Wholesale Club and Danna Eldridge from DECA will discuss retailer issues on a panel moderated by Morgan of ACP.
- Steve Frenda of the In-Store Marketing Institute will present the latest trends and best practices in shopper marketing from all corners of the in-store experience.
- Mark Peiser of News America will present research on both FSIs and in-store couponing.
The conference was developed under the leadership of ACP in collaboration with the Food Marketing Institute (FMI), Grocery Manufacturers of America (GMA), GS1 US, CIC and the Promotion Marketing Association (PMA).
Previously announced speakers include:
- Steven Vowles, senior vice president of marketing at Stop ‘n Shop will demonstrate successes in their loyalty program with targeted digital coupon offers on personal scanners
- Adam Schwartz, president of Couponsurfer.com, will shares consumer insight from the 1.6 million registered users of this coupon aggregation website.
- Tom Murray, Vice President and General Manager of Free Standing Inserts at Valassis, will present consumer insight and trends on the largest coupon distribution vehicle: FSI’s
- Laird Garner with Digital Incentives Journal International, will analyze the “Mobile Internet Revolution” and how mobile internet and digital coupons and incentives will impact the industry.
Each attendee will receive the book “How You Do What You Do” by Bob Livingston who will share how to differentiate oneself through service excellence. An afternoon of track sessions will deal with specific topics in the coupon industry.
More information is available at www.couponpros.org and 610-789-9993.
