New digital paths, as at Publix, could cut fraud

March 11, 2013

Food and non-food marketers find new ways to influence eight out of 10 consumers who still use CPG coupons.

Coupon dynamics are changing.

Marketers issued 305 billion coupons in 2012, the same as in 2011.  Yet “who was promoting, what was being promoted, where it was promoted, and how marketers used coupons in 2012 all differed substantially from the recent past...Redemption results were very different as well,” states Charlie Brown, vice president-marketing, NCH, a Valassis company. 

Understanding these shifts will help retailers and CPG distribute coupons more effectively, in tandem with launches and promotions or independent of such events, says The Lempert Report.

These differences are:

  • Non-foods (medications, personal care, household supplies) comprised 4.4% more of available coupons in 2012.  In these categories, delayed purchases and numerous brand and store-brand choices are common.
  • Food coupons were 6.5% fewer than in 2011.
  • For 46% of consumers who say they used fewer coupons in 2012, their top reason was, “I can’t find coupons for the products I want to buy.”
  • FSI coupons issued to accompany new product introductions soared by 23.2%, reports Marx, a Kantar Media solution.  These typically have narrower target audiences and smaller redemption volumes, notes NCH’s Brown.
  • Digital coupons (posted to loyalty cards and mobile devices, or printed at home) remain less than 1% of all coupons distributed.  Print-at-home coupons now account for nearly 6% of all redeemed coupons in the United States, and all paperless represent slightly more than 1% of redeemed coupons.
  • Just 2.9 billion CPG coupons were redeemed in 2012, down 17% from 2011, due to these strategy shifts by marketers.  Brown says 2011 had unusually high redemptions, and so marketers corrected or over-corrected in 2012.

One constant, however: 79.8% of consumers regularly shop using CPG coupons, about the same as 80.6% in 2011, and far ahead of the pre-recession 2007 figure of 63.6%, adds NCH.

Moreover, digital is on the rise.  To prevent fraud and keep it easy for consumers to use digital coupons, the Food Marketing Institute, Grocery Manufacturers Association, and National Grocers Association issued voluntary model practice guidelines developed recently by the Joint Industry Coupon Committee.

One area of digital growth is SMS-based coupons on mobile phones.  A new RadiumOne study reveals that 61.9% of women age 35 to 54 have redeemed grocery and CPG retail coupons—and of these, 42.4% prefer to receive the SMS coupons.  Related findings: 51.5% prefer to display coupons to a cashier while 23.8% prefer scanning-based methods.

“We’re starting to see a pivotal shift in brand campaign strategies that are increasingly focused on reaching mobile audiences.  Mobile coupons in particular are a great way to increase engagement, conversion rates and ultimately ROI,” says Kamal Kaur, vice president-mobile at RadiumOne. 

Publix Supermarkets, which has no loyalty card program, is currently rolling out a digital system that automatically deducts coupon amounts for verified purchases during checkout.  Customers must first register at the website with their phone number and indicate coupons that interest them.  The system could help reduce coupon fraud and paper handling, and enable Publix to see how coupons influence buying behaviors, notes The Tampa Tribune.

This could be a first sign of what’s next in digital couponing, says The Lempert Report.  On the horizon—determining if customized coupons, higher-value offers, or easy-to-use technology would raise redemption rates.