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Top If you like our site, please bookmark it so it will be easy to find later. Improve your business coupons with new Barcode Software. With all of the advancements in Barcode Technology updating your equipment like Barcode Printers, Scanners and more. COUPON RELATED ARTICLES
WHERE
ARE CONSUMERS USING THEIR COUPONS?
COUPONING AS A MARKETING STRATEGY IN-STORE, ON-PACK AND DIRECT MAIL COUPONS COUPONING SCHEMES ON THE INTERNET HOW TO DEVELOP A SUCCESSFUL FSI COUPON STUDIES SHOW COUPONS REMAIN AN EFFECTIVE PROMOTIONAL
TOOL GUIDELINES TO CREATING AN EFFECTIVE COUPON MARKETING
RELATED ARTICLES FREQUENT SHOPPER & RETAILER ARTICLES
A study by direct mail media company Advo has found that Hispanic’s redeem coupons at the same level as other demographic groups. They obtain coupons from newspaper inserts, direct-mail and in-store take-one machines. The Advo study also found:
Vincent Andaloro, president of Latin-Pak stated that "If advertisers would spend more money on coupons they would reach more Hispanic consumers because they skew 33% higher on supermarket spending on a weekly basis than traditional general market families." The Hispanic family unit is much larger, so they need more food and they eat home more often." Latin-Pak deliver coupons via direct mail, using Hispanic consumer databases. It also delivers them door-to-door, and sends Spanish-language free-standing inserts. Its weekly FSI circulation is about 9 million. Marketers should make sure coupon campaigns are culturally and geographically relevant, especially when it comes to food products and recipes, using frequent and consistent messaging. They should also conduct in-store sampling events with bilingual personnel. Coupon redemption rates range from 6% to 24% and sales can go up by 20% to 65%, depending on the brand and offer, says Geoff Gropp, president of the Hispanic Retail Network, a company that offers in-store dispensers with coupons. An estmated 73% of all Hispanic shoppers enjoy looking through coupons and offers in the mail and 62% choose stores based on coupon offers and 60% of Hispanics look through direct mail grocery flyers on a regular basis according to El Mercado, a 2005 study on U.S. Hispanic shopping behavior from the Food Marketing Institute. .Return to the top of the page
A recent VSI Targeting study into the relevant factors contributing to coupon redemption examined the context and results of over 2,500 offers distributed over a 6-year period found 12 factors with varying levels of influence. The study examined over 2,500 individual coupon offers distributed from 2000-2006. These offers represented a wide range of product categories, including refrigerated, frozen, dry grocery, dairy, health and personal care. VSI Targeting used two metrics to evaluate the relative success a coupon: CPUM (the cost per unit moved where "cost" includes distribution, face value, redemption and handling) and redemption rate (coupons redeemed divided by coupons distributed). High Variability Factors Five of the 12 factors are highly variable, meaning that results will be very dependent on the specific brand and competitive environment in which they operate. The high variability factors include:
Medium Variability FactorsTwo of the 12 factors have some variability from brand to brand. These include:
Low Variability FactorsFive of the 12 factors have very little variability from brand to brand. These factors will tend to have a universal impact, regardless of the market situation. These include:
The key is that brands do behave very differently. It is important to review, evaluate and understand your brand’s history and market environment. Source: CouponInfoNow www.couponinfonow.com .Return to the top of the page
Although the economy has stabilized to some degree, consumers who turned to alternative retail channels during harder times are continuing to shop in these channels. This shift in consumer spending has been paralleled by a shift in consumer coupon redemption. Understanding where consumers are using their coupons is crucial for marketers seeking to match their consumer and trade spending to changing consumer shopping patterns. According to a study by The Food Institute and Willard Bishop Consulting, in 1998, traditional grocery formats accounted for nearly 90% of grocery and consumable sales. By 2003, these retailers only accounted for 56% and by 2008, they are predicted to account for less than 50%.¹ Much of this spending is expected to shift to pharmacies, dollar stores and warehouse clubs ? retail formats which are not typically associated with coupon redemption. But does coupon redemption follow these trends? The below chart suggests that this shift does indeed apply to coupon use.
Within aggregate redemption, different types of coupons are redeemed through the respective channels to varying degrees. The most prominent coupon distribution method ? the free-standing insert (FSI) ? is redeemed according to aggregate trends, with 72% being redeemed in supermarkets and 19% in mass merchandisers. Other distribution method topics of interest include:
Coupon redemption by class of trade also varies by product category. Coupons for household products represent the largest portion of coupons redeemed at mass merchandisers, dollar stores, and military commissaries. Over 80% of coupon redemption for perishable products (frozen, refrigerated, packaged deli) still comes through supermarkets. 59% of coupons redeemed at convenience stores are for beverages. Coupons distributed through different methods and for different products can be expected to redeem in specific channels. This consideration is important for marketers seeking to drive channel-specific traffic, which in turn impacts choices regarding in-store marketing support. Following a coupon all the way to its use at point-of-sale provides a unique way for marketers to observe the consumer purchase process. Source: CMS, Inc. Advantage Update, "Redemption by Class of Trade," Issue 2, 2005. For more information on this study, please contact CMS Market Researc .Return to the top of the page
In order to promote faster sales and controlling liability, marketers have shortened coupon expiration periods, or the length of time during which a consumer can redeem a coupon. Since 1996, the average expiration period of manufacturer coupons has decreased 14.7% and now stands at 2.9 months. And, if the current trend continues, expiration periods will fall below 2.5 months within the next 5 years.
At the same time, research by CMS shows that consumers dislike short expiration periods, stating that the shorter lengths often don’t allow them enough time to use the coupon. Before setting a coupon offer’s expiration date, marketers should take the following points into consideration:
Source: CouponInfoNow www.couponinfonow.comCMS, Inc. Advantage Update, "Expiration Periods", Issue 4, 2007. For more information on this study, please contact marketresearch@inmar.com. To obtain a copy of this study, please click on the CouponInfoNow.com Studies and Reports tab found on the left navigation panel..Return to the top of the page
Brands increase coupon investment by 6%, more expected for 2008Consumers bucked a 16-year trend by redeeming 2.6 billion manufacturers’ coupons in 2007, the same number as the previous year. Prior to 2007, consumer response to coupons consistently declined year-over-year from a high of 7.9 billion coupons in 1992. Economic pressures and consumer-friendly tactics combined to guarantee continued consumer and manufacturer engagement with cents-off offers. Soft economy yields strong coupon responseComparing coupon response to key economic indicators over time suggests a strong link between the economy and coupon redemption. Most notably, as unemployment and prices rise, coupon redemption increases.
Coupon response tends to run counter to economic indicators. When the numbers indicate a secure economic future, consumers tend to pay less attention to coupons. But, when the numbers indicate an economic downturn, consumers turn to economizing behaviors such as using coupons. Marketers issued 302 billion coupons in 2007, a 6% increase over the previous year. However, that increase belies the fact that manufacturers reduced the number of promotional offers by over 8% while increasing the circulation of those offers by nearly 5%. Last year, brands saw coupons as more of a mass advertising media. Instead of issuing a lot of finely-tuned, targeted marketing efforts, brands tended to use coupons to support competitive messaging or new product launches. New products and competitive messages require richer offerings to get the attention of potentially less receptive audiences. Therefore, the broader messaging brought a significant increase in coupon values. Average values increased 10 cents per coupon to $1.28, marking the highest level seen to date. At a nearly 9% increase, 2007 also saw coupon values outpace price increases for the first time since 2004.
Trends driven by non-food promotionsWhile overall coupon distribution was up 6%, distribution of coupons for non-food products was up nearly 13%. Food coupon distribution was down slightly, with 2% fewer coupons than in 2006. Non-food coupons also led the way in face value, upping values by nearly 7%, compared to the 5% increase in food coupon values. Significant competitive activity in non-food categories did contribute to these trends. However, the increased activity drove down non-food coupon response rates to 0.54% (down from 0.60% in 2006), while food coupon rates remained relatively stable at 1.27% (up from 1.24% in 2006). For over 20 years, CMS has provided promotions logistics services to leading consumer products companies. Over 700 clients rely on CMS’s services for all types of promotions, encompassing every point of the promotion’s lifecycle. CMS’s ability to provide a seamless experience, from strategic consulting to post-campaign analysis, empowers promotional productivity. Source: CouponInfoNow www.couponinfonow.com
Couponing
not only provides short-term product movement and sales, it also provides an
advertising benefit. Historically,
advertising increases long-term brand equity, creates brand awareness, image and
delivers a brand message. It is
very difficult to determine that advertising benefits of promotions such as
Free-Standing Inserts (FSI) coupons. The
return on investment of issuing coupon promotions is normally determined by how
many coupons were redeemed and do not evaluate the reach, brand awareness or
advertising value of couponing. An FSI delivers a brand message, conveys an image, reaches a
large portion of the population (60 million circulation) for a relatively low
cost ($7.00 per thousand inserts), and consumer’s look at FSI’s for coupon
promotions. Both
advertising and consumer promotions generates product awareness, enhances the
brand’s image and increase sales. Brands must not compete solely on the basis
of price. A study by Roper ASW that compared FSI advertising to magazine
advertising reported that “ FSI advertising has the same kind of impact as
magazine advertising to build brand awareness and brand equity. Coupons
are promotional offers used by consumers to redeem a cash value or free item at
the point of sale in retail outlets. These coupons require bar code structures
as defined within the EAN/UCC for scanning purposes. Scanning coupons provides
several advantages including: The
efficiency of coupon handling at the point-of-sale and reconciliation;
A well-designed coupon is a valuable and effective marketing tool. Developing a compelling offer to the consumer, the proper technical specifics and a good design moves product off the shelf as well as delivers extra advertising value at minimal cost. A poorly designed coupon may cause problems for retailers and consumers. The result: confused consumers, unhappy retail customers and increased costs for you. While the specifications of your coupon should suit the situation, following best practices for designing coupons can enhance your success with coupon promotions. In-ad
coupons offer benefits to both retailers and manufacturers. Retailers can use
in-ads to encourage store loyalty, defray their coupon costs, gain control over
design, timing, and distribution of coupons, and enhance their image through
brand association. Manufacturers can improve trade relations, encourage
immediate product sales, target specific market segments, preempt competitive
activity, and provide promotional support to retailers, thereby encouraging them
to buy products. Cooperation between the manufacturer and retailer in creating
an in-ad offer is essential to the success of the program. One
of the biggest factors in coupon redemption is finding the product in the store.
Many consumers are tired of taking a coupon to the store only to find the store
does not stock the product. The rise in INTERNET downloading of coupons is most
likely a cost reduction on an item the household normally uses, not trial of a
new item. Any increase in coupon redemption is generally related to economic
uncertainty, not geo-political.
Consumer Product Goods (CPG) marketers are beginning to devote more of their budgets to online marketing. They are offering coupons that customers can print out at home and redeem at the store. Consumers downloaded about 242 million coupons last year, an increase of 111 percent over the 114 million downloaded in 2001, according to Carolina Manufacturer Services Incorporated. Of those, 7.6 million were redeemed, which is more than a 400 percent increase from the 1.7 million in 2001. But online coupons remain less than one percent share of the coupon market. More than 335 billion paper coupons were distributed last year, with 3.7 billion being redeemed for a total of $3.1 billion. Lorraine Gallaher, director of marketing for CMS, said "The growth in online coupons is quite significant and with the economy the way it is, once consumers realize they can get better values online, there's a good chance more of them will make that switch. In addition, online coupons are much less likely to require customers to buy more than one unit of a product and the average time to expiration is 4.8 months, versus 3 months for the typical newspaper coupon.” One company that has used online coupons extensively stated that they spend 20 percent less to acquire each new customer in marketing campaigns that include coupons, compared with noncoupon campaigns. One benefit of using online coupons is the ability to track such statistics. When the coupon is downloaded, users give the company their name, e-mail address and other information. The coupon's code is tied to each individual user, so when it is redeemed, the company knows who redeemed it and where. The SmartSource iGroup, which includes the online coupon unit (SmartSource.com) of the News Corporation's News America Marketing Division. works similarly to many other online coupon sites. Users register with the site, including details about family members' ages, gender and pets, along with the names of stores where they shop. After that, users have free access to 30 to 35 coupons on a given day, worth about $14. Manufacturers pay SmartSource an undisclosed fee each time a consumer redeems a coupon. "We're seeing companies start to budget for this, which hasn't happened before," said Bill Christie, SmartSource's president. Other coupon providers include CoolSavings, which offers discounts and coupons for online and off-line companies, and E-centives. CoolSavings last year began to offer coupons on sites other than its own, a service that Coupons Incorporated and E-centives also provide. Manufacturers often place the coupons on their own sites, where they can have more control over the presentation. Coupons Incorporated distributes coupons on behalf of more than 200 Web sites, according to its chief executive, Steven Boal. Mr. Boal said that there were no definitive statistics on the size of the online coupon industry but that what marketers pay for the coupon distribution and redemption process is probably in the neighborhood of $50 million per year compared with the $2 billion that marketers spend annually delivering coupons in Sunday newspapers. Grocery executives are showing more interest in online marketing because the typical Internet user is much like customers who come into their stores. A recent report by Forrester Research, a technology research firm, found that 50 million households in the United States qualify as middle income, defined as earning from $25,000 to $75,000 a year. Of those, 69 percent are now online. A Forrester analyst said those Internet users are obvious potential customers for online coupons because they tend to be the heaviest off-line coupon clippers. A recent study by NFO Worldgroup outlined Internet coupon usage in the U.S. by product category as follows:
A study by AC Nielsen, based on the answers of nearly 10,000 respondents revealed that coupon use is all encompassing across all segments of Canadian society. This study confirms that key grocery shoppers in larger, middle-income households with children are much more likely to have used coupons. The study provided regional information on coupon usage that Quebec grocery shoppers use more coupons, more frequently and that coupon use is significant among all levels of society, including households who do not speak either French or English at home. AC Nielsen presented these findings at the Audit Bureau of Circulation Annual Coupon Forum. The study revealed the following key findings:
The
breakout-results by language spoken confirm that shoppers, whether they speak
English or French at home, use coupons frequently when they shop for groceries.
In households that used neither official language at home, however, the
survey also showed that more than 50% of this group had used at least one coupon
during the past month and 30% had used two or more coupons on their last main
grocery-shopping trip. Considering
the fact that many non-English/French households are first and second generation
Canadian, this means that new immigrants quickly become accustomed to using
coupons, which are rarely used outside of North America and Europe. More importantly, this presents marketers with a great
opportunity to influence the purchase decisions, and establish the brand
preferences, of this growing segment of our population that may also be
difficult to reach through other forms of marketing communications.
A key reason
Quebec consumers use more coupons, more frequently is that Quebec shoppers have
greater access to coupons than consumers in other regions.
Grocery retailers and manufacturers distribute more coupons per household
in Quebec. In fact, Quebec is the
only region where coupons are still a regular part of grocery-retailer
advertising flyers. More coupons
are also distributed in store and directly to consumers’ homes in Quebec. Coupon
results show that redemption rates vary by region, not only because of
variations in coupon usage levels, but also because of regional differences in
market share and in household penetration of the couponed product.
As a result, coupons in some categories achieve higher rates in different
regions. Regardless of relative
redemption rates in all regions, however, coupons work by keeping current users
loyal and by attracting new users and competitive users to a brand. Advertising, trade promotion and couponing, along with other forms of consumer promotion, keep adding consumers to the brand. Research shows that consumers who are added to a brand’s user base by couponing and advertising stay loyal to the brand longer than those who are added through in-store feature price promotions. In addition to gaining trial, coupons keep consumers in the brand’s user base longer and help prevent them from slipping away to another brand, to a store brand or out of the category. Coupons do this by attracting consumer-attention and making advertising more efficient, everywhere. The new Nielsen consumer survey shows that coupon use remains high across all regions in Canada. Most key grocery shoppers, regardless of the language spoken at home, look for and use coupons. Reaching them all with coupons helps enhance and protect a brand’s market position.
Coupon highlights from 1999 -
2001
Since 1995, 50 consumer packaged goods manufacturers have average 11% annual profit growth, with an average annual sales increase of less than 5%. The slow growth for manufacturer and retailers stocks are primarily due to acquisitions and mergers. To increase growth, marketers must increase their return on their investments. Retailers and manufacturers must develop a disciplined, coordinated and committed consumer oriented marketing process that achieves their return on investment goal. Grocers must combine primary and secondary data to define consumer targets creating a single source platform for target development. They must define the consumers purchase behavior. Advances in data collection and integration allow marketers to plan, execute and evaluate marketing efforts on a targeted basis. Improving return on investment requires consumer product goods marketers to realign their consumer marketing mix allocation. They must allocate promotional spending according to the consumer's reaction to different targeted promotions, evaluate the effectiveness and analyze the volume and share increase was gained versus the investment made. This evaluation will then lead to new action plan for improving product and brand performance. What online promotions are most effective?
Source: Forrester Research, Incorporated Return to the top of the page
The number of coupons distributed by manufacturers and redeemed by consumers in Canada for the year 2001 was the largest increase sin more than 10 years. There were 2.67 billion coupons distributed in 2001, a 6% increase over 2000, while consumers redeemed 122 million coupons, a 9% increase from a year earlier. Consumers saved $128 million on products which is 7% more than consumers saved with coupons in 2000. The value of coupons distributed increased to $1.25 due to the Health and Beauty Aid, Infant Care and Pet Food categories. The average value of coupons distributed increased by 17¢, which is 16% higher than a year earlier. Couponing on Infant Care, Pet Foods and Household Care products accounted for 30% of all coupons distributed last year, up from 26% a year earlier. Growth in these categories offset declines in the food and personal care categories. Coupons on food products accounted for 40% of all coupons distributed, which is a decrease of 4 percent from 2000. Food product coupons, however, accounted for 55% of all coupons redeemed by consumers. On average, food product coupons had above average redemption rates even though their face values tend to be lower than in other categorie | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
