Coupons: More, More, More

Resistance by CPG marketers to lower baseline prices to retailers has them delivering savings to consumers in other ways –

Resistance by CPG marketers to lower baseline prices to retailers has them delivering savings to consumers in other ways – deeper and more frequent promotions, and more cents-off coupons. In calendar 2009, overall coupon distribution rose by 11% to 311 billion coupons – and redemptions rose by 23%, with successive gains each quarter, detailed the 2010 NCH Coupon Facts Report.

In all, 30% of consumers said they used coupons more in 2009 than prior. Coupons redeemed for grocery products soared by 25%, representing 2 billion coupons with an average face of $1.16; two-thirds of grocery coupons were worth more than 75 cents each, noted the report from NCH Marketing Services, Inc., a Valassis company.

CPG marketers increased their coupon presence across practically all major forms of coupon media. Except for newspapers, which indexed down 13% in calendar 2009, every other specific channel indexed between 4% and 58% higher in coupon distribution volume this past year, according to NCH data. In sequence, they are:

• Military, up 4%
• Freestanding inserts, up 9%  (#1 share at 85.9%)
• Magazines, up 20% (#4 share, 2.4%)
• In-store handouts (but not coupons on packages), up 22% (#2 share, 5.6%)
• In/on pack, up 39%
• Direct mail, up 43% (#3 share, 2.6%)
• Internet, up 58%  (just 1% of distribution, but with nearly 10% redemption rates)

What’s the industry facing? “Abiding uncertainty on the part of consumers,” Charlie Brown, NCH vice president of marketing, told The Lempert Report in an interview. “GDP [Gross Domestic Product] figures aren’t the most direct measure of how people feel and how they will shop and save. Unemployment is a much better indicator. In the post 9/11 period, there was long trailing high unemployment. Economists expect the same in this recession.”

Since “coupons are higher value now, and an ingrained part of the shopping experience,” and people feel uneasy over economic prospects, Brown expects coupon growth will continue. “We had been tracking growth in coupon use at mass merchants at the expense of the grocery channel, but that flattened this year. People eating at home more are shopping everywhere with coupons,” he adds.