Coupons in consumer sweet spot

Consumers, still serious about savings, increasingly turn to coupons. FSIs and digital distribution are up.

What’s new about America’s coupon revival? First, CPG set new records in the number of coupons issued in 2010 – up 6.8% over the prior year to 332 billion coupons. Second, these coupons represented $485 billion in potential savings, up 13.9% over a year ago, and 47.4% ahead of five years ago. Third, consumers redeemed $3.7 billion worth of those savings using CPG coupons in 2010.

So reported NCH Marketing Services, a Valassis company, in its 2010 Coupon Facts Report.  “With so much money at stake, brand manufacturers and fast-moving consumer goods retailers must ensure their expenditures are protected, while continuing to collaborate for the most effective use of coupon promotions to meet strong consumer demand,” says Charlie Brown, NCH vice president of marketing.

These savings help ravaged family budgets cope with food inflation, which is escalating in 2011, and price hikes on other household goods.   Nearly eight in 10 consumers (78%) use coupons regularly, up from the pre-recession level of 63.3%, states NCH. “Consumers’ continued interest in coupons and savings has been influenced by concerns over their own personal economic situations. As a result, they are using more coupons, seeking savings wherever they can, combining print and digital offers, and permanently becoming strategic shoppers,” observes Suzie Brown, Valassis chief marketing officer.

While digital continues to make inroads, freestanding inserts accounted for 87.7% of all CPG coupons distributed in 2010, NCH data show.  FSIs were the vehicles for an additional 19 billion coupons in 2010, largest volume increase of all media. In-store media came in at #2 at 5.2% of total coupons distributed.

Of all coupons issued in 2010, two-thirds or 216 billion were for grocery products, up 8% from 2009. Health and beauty care comprised the rest, up 4.5%.  Seven of the top 10 fastest-growing categories were in nonfoods, reports NCH, as marketers aimed to make these items more desirable. The NCH Top Ten are: oral hygiene, laundry supplies, fresheners & deodorizers, household cleaners, shelf-stable breakfast foods, pet food, yogurt, personal cleansing & bath products, detergents and liquor.

Meanwhile, digital coupon events soared by 33.6% in 2010, and these were offered by 290 CPG manufacturers, up 17.4% from 2009, according to key websites tracked by Marx, a Kantar Media solution.  Food categories accounted for nearly two-thirds of the digital coupons offered, and non-foods the rest.

The leading categories by share in digital coupons in 2010, reports Marx:  Dry grocery (29.6%), personal care (17.3%), refrigerated foods (15.9%), health care (10.2%), frozen (8.9%), household goods (7.8%), cereals (5.8%), shelf-stable beverages (3.7%), and other packaged goods (2.7%).