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 | Size. The GS1 DataBar is a variable length code meaning that it doesn’t have fixed dimensions. Depending on the data coded within the DataBar, the Interim Dual Code’s footprint on the coupon may be slightly smaller or larger than the earlier Extended Code. |
| Offer Value. The two codes that make up the Dual Code must have matching data. For example, even though the DataBar offers new options for face values, you still need to use a face value in the value code table during the interim period. |
| The Image. While the Interim Dual Code is made up of two different code symbologies, it is recommended to use one image that contains the two codes. It may be tempting to use two images, but that could prove tricky and cause scanning issues. |
| Verification and Validation. The only way you can be confident that the coding will work as intended and that the two codes match, is to rely on a verification and validation service. |
The guidelines are available from GMA, FMI, and GS1 US.
IF YOUR ARE A VICTIM OF FORGED CHECKS
According to a recent Federal Reserve study, banks lost $711 million to check fraud in 2006 and estimated loses to consumers and businesses were as high as $20 billion a year. If you become a victim of forge checks, you should:
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Immediately report the theft to your bank, close your account and open a new one. |
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Obtain a notarized affidavit of forgery from the bank showing the range of stolen check numbers. |
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File a police report and get a copy. |
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Place credit alerts on your files at the three credit reporting bureaus so new account cannot be opened without your knowledge. |
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Respond promptly to payment demand letters from businesses and collection agencies with a brief cover letter and copies of documentation showing some checks were stolen. |
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Follow-up with collection agencies to ensure that your name has been cleared from their bad checks list. |
The new GS1 DataBar is close to becoming reality as plans are in place for the industry to begin using the interim "dual" coding (a combination of the current UPC-A and the GS1 DataBar), but without the extended code in January 2008. The JICC and GS1 US have approved the Application Identifier (AI) 8110 for use on the GS1 DataBar. The AI is a field of two or more digits at the beginning of a code string that uniquely identifies the format and meaning of the code. The AI 8110 indicates that the GS1 DataBar using it is on coupon. The GS1 Board Committee of Standards still must ratify this AI; however, the GS1 US sees no reason for the AI not to be ratified.
The JICC and other industry partners are finalizing the GS1 DataBar Coupon Application Guidelines to clarify document wording and proof the document for errors. A final document is expected in September.
Now is the time to begin using the new coupon coding format, called the GS1 DataBar. If you’re not ready, it could cause serious problems for your consumers, compromise coupon data accuracy and create problems during the redemption process. That means you need to have a comprehensive GS1 DataBar implementation plan in place today.
FMI RELEASES
STATE OF THE GROCERY INDUSTRY
The Food Marketing Institute (FMI) released its Food Retailing Industry Speaks: Annual State of the Industry Review 2007 total sales grew 5.3 percent last year while same-store numbers were up four percent. Large national chains reported strong sales and profit numbers as opposed to smaller chains and independents. Nearly one in four grocers (23.5 percent) saw a decline in same-store revenues and the number was even more pronounced (47.1 percent) when inflation was factored in.
"These results are impressive in view of all the rising costs the industry must bear, including energy, healthcare, credit card interchange fees and the imperative to keep improving products and services in today's extraordinarily competitive marketplace," said FMI senior vice president Michael Sansolo. "However, it is also clear that many retailers are struggling to solve the puzzle of cutting costs as much as possible while continually improving customer service." The top challenges faced by supermarket operators are healthcare costs, credit/debit card interchange fees, energy costs, staffing, hiring and employee retention, technology investments and food safety.
Grocers of all sizes are looking for ways to differentiate and find sustainable niches from which to operate. Ethnic foods are common in most markets today with 83.9 percent offering these items and 72.4 percent of operators offering a natural/organic food aisle or section. Forty-six percent reported having developing store organics to meet the demand for these items.
According to "The Future of Food Retailing" by Willard Bishop, traditional grocery channels accounted for just over half (50.4%) of annualized grocery and consumables sales in 2005. Convenience stores accounted for an additional 16.2%, while non-traditional grocery channels (wholesale clubs, supercenters, dollar stores, drug stores, mass merchandisers and military commissaries) accounted for the remaining 33.4%.
By 2010, traditional grocery channels and convenience stores are expected to see their shares of grocery and consumable sales continue to decline to 44.1% and 15.4%, while the share for non-traditional grocery channels will climb to 40.5%. (Source: "The Future of Food Retailing", Willard Bishop Consulting, July 2006).Grocery spending has shifted to non-traditional grocery outlets, including mass merchandises, dollar/discount/variety stores and pharmacies, however, almost 70% of all coupons are still redeemed at conventional supermarkets. That’s good news for supermarket chains but not so good for marketers because almost 70% of their coupons are used with only 50% of the sales. Only 16% of coupon redemption come from superstore/discount channels where40.5% of sales are made.
CMS REPORTS ANNUAL COUPON DISTRIBUTION TO 286 BILLION
CMS announced that over $331 billion in potential consumer savings were distributed through coupons in 2006 with over 2.6 billion coupons redeemed. Marketers found that almost 142 million consumers used coupons with substantial usage across ethnic and demographic lines. Coupon distribution declined by 12% in 2006, with a corresponding 13% drop in redemption with more than 286 billion coupons distributed.
The emphasis on Free-standing Inserts (FSI’s) continues to grow despite continued declines in newspaper readership. About 89% of the coupons in 2006 were distributed via FSI’s in Sunday newspapers. Overall, 92.5% of all coupons were distributed via methods sent directly to the home (direct mail, newspaper, magazine, etc). The use of in-store methodologies declined slightly in 2006, from 5.3% to 4.9% of all coupons. The percent of coupons redeemed by in-store method, though, increased to over 34%. Clearly, different targeting and distribution strategies allow marketers to reach consumers in compelling ways.
The average expiration period fell somewhat to 2.9 months, and the average expiration period for FSI coupons held steady at 2.6 months. Average face value also declined, both on a per-coupon and per-item basis. For the second consecutive year, the increase in the consumer price index (CPI) outpaced the increase in the average face value distributed for all coupons, possibly causing consumers to find coupons offers less attractive. The prevalence of multiple purchase coupons also increased, to almost 28% of all coupons distributed. As marketers continue to address changing demographics and technologies, and customize their coupon promotions likewise, they will ensure greater consumer response. Coupons remain a relevant and compelling way to reach consumers and move product, but adaptation is necessary for marketers’ offers to stay relevant.
FSI
DELIVER 253 BILLION COUPONS WORTH $300 BILLION IN 2006
Marketers distributed 253 billion coupons via FSIs last year, worth more than $300 billion in discounts to shoppers. The number of FSI pages hit a record 200 billion, up just over 1% for the year, according to FSI tracking service Marx Promotion Intelligence, Minneapolis.
Although the number of coupons slipped 0.1% from 2005, page volume grew 1.1% to a record level. Average coupon face values also achieved record levels, rising 4% to $1.19. Coupons from nonfood consumer packaged goods drove this growth, rising 3.6% to $1.45, according to the 2006 Marx FSI Distribution Trends Report.
Packaged goods brands accounted for 67.4% of all FSI pages, followed by direct response ads (23.4%) and franchised restaurants (9.2%). Among packaged goods, non-food brands ran 2.7% more coupons than they did in 2005, and food brands ran 3.9% fewer, according to Marx’s annual FSI Distribution Trends Report. The firm does not track coupon redemption.
The top 10 product categories for coupon distribution were:
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Household cleaning products (12.4 million coupons, down 5.7%) |
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Pet food and treats (12.3 million coupons, up 12.4%) |
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Rug and room deodorizers (10.8 million coupons, up 15%) |
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Cross-category personal care (10.5 million coupons, up 7.5%) |
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Snacks (7.2 million coupons, down 3.4%) |
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Cough, cold, sinus and allergy (6.7 million coupons, up 4.7%) |
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Hair care products (6.2 million, up 0.8%) |
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Vitamins (6 million, down 14.7%) |
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Dishwashing soap (5.5 million, up 5.9%) |
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Cereal (5.5 million, down 8.2%) |
The 10 manufacturers that dropped the most coupons last year were Procter & Gamble; General Mills; SC Johnson & Son; Unilever; Reckitt Benckiser; Nestle; Johnson & Johnson; Altria Group (including Kraft Foods); Colgate-Palmolive Co. and Kimberly-Clark Corp.
New product launches have always been a strong catalyst for couponing, and 2006 was no exception: Marx tallied coupon support for 384 product launches from packaged goods brands. "Consumers continue to seek out FSIs to be exposed to new products, gain additional product information, benefit from purchase incentives, and plan their shopping trips," said Marx Chief Operating Officer Mark Nesbitt in a statement. Sunday newspaper FSIs reached an average of nearly 70 million households each week. The heaviest activity came just before Easter (April 2, 144 FSI pages) and Thanksgiving (Nov. 11, 128 FSI pages).
CMS announced that over $331 billion in potential consumer savings were distributed through coupons in 2006 with over 2.6 billion coupons redeemed. Marketers found that almost 142 million consumers used coupons with substantial usage across ethnic and demographic lines. Coupon distribution declined by 12% in 2006, with a corresponding 13% drop in redemption with more than 286 billion coupons distributed.
The emphasis on Free-standing Inserts (FSI’s) continues to grow despite continued declines in newspaper readership. About 89% of the coupons in 2006 were distributed via FSI’s in Sunday newspapers. Overall, 92.5% of all coupons were distributed via methods sent directly to the home (direct mail, newspaper, magazine, etc). The use of in-store methodologies declined slightly in 2006, from 5.3% to 4.9% of all coupons. The percent of coupons redeemed by in-store method, though, increased to over 34%. Clearly, different targeting and distribution strategies allow marketers to reach consumers in compelling ways.
The average expiration period fell somewhat to 2.9 months, and the average expiration period for FSI coupons held steady at 2.6 months. Average face value also declined, both on a per-coupon and per-item basis. For the second consecutive year, the increase in the consumer price index (CPI) outpaced the increase in the average face value distributed for all coupons, possibly causing consumers to find coupons offers less attractive. The prevalence of multiple purchase coupons also increased, to almost 28% of all coupons distributed.
As marketers continue to address changing demographics and technologies, and customize their coupon promotions likewise, they will ensure greater consumer response. Coupons remain a relevant and compelling way to reach consumers and move product, but adaptation is necessary for marketers’ offers to stay relevant.
VALASSIS
COMPLETES ACQUISITION OF ADVO
LIVONIA, Mich., March 2 /PRNewswire-FirstCall/ -- Valassis (NYSE: VCI) announced today the completion of its acquisition of ADVO, Inc., the nation's leading direct mail media company, for an acquisition price of approximately $1.2 billion (on a fully diluted basis), including the refinancing of approximately $125 million in existing ADVO debt. The transaction was finalized on Friday, March 2, 2007. Shares of ADVO common stock were acquired by Valassis for $33.02 per share in cash, which includes interest accrued from Feb. 28, 2007 in accordance with the merger agreement. As a result of the acquisition, ADVO common stock will no longer be traded as of Monday, March 5, 2007.
Valassis funded the ADVO acquisition, together with the refinancing of ADVO debt and the payment of fees and expenses, through an $870.0 million senior secured credit facility with a syndicate of lenders jointly arranged by Bear, Stearns & Co. Inc. and Banc of America Securities LLC, $540.0 million in Valassis' 81/4% Senior Notes due 2015 and existing cash on hand.
The combination of Valassis and ADVO
provides the delivery of value- oriented consumer promotions by blending home
newspaper delivery with shared direct mail. The combined company features the
most comprehensive products and services offering in the industry serving over
15,000 advertisers worldwide, including 96 of the top 100 advertisers in the
United States. The combined company now has 7,500 employees with operations in
22 states and nine countries.
"Today is a historic day as it marks the largest acquisition in Valassis
history, further advancing a key growth strategy put into effect eight years
ago," said Alan F. Schultz, Valassis Chairman, President and CEO. "By
combining Valassis and ADVO, we are creating the nation's leading marketing
services company. With complementary products, customers and distribution
methods, we will now be able to offer superior customer solutions of unmatched
reach, scale and value. This unique offering will allow us to gain a greater
share of our customers' marketing budgets. We are working to make the
integration process as seamless as possible for all of our stakeholders. In
addition, over the next few years we will work diligently to maximize free cash
flow and reduce debt."
"We are excited to have finalized the Valassis-ADVO transaction and begin writing a new chapter in the company's history by combining ADVO's highly complementary shared mail with Valassis' newspaper-delivered offerings and existing 1 to 1 channels," said Robert A. Mason, ADVO President. "ADVO's extensive shared mail network will augment Valassis' newspaper distribution network by providing shared mail reach to over 90 percent of U.S. homes. We now have the ability to grow our business by offering customers jointly- developed programs which optimize and integrate the usage of multiple distribution methods."
Mr. Schultz will remain in his current role and lead the combined company, with Mr. Mason serving as President of ADVO. Valassis' executive management team will take an active role in the combined company's strategic direction. William F. Hogg, Valassis Executive Vice President of Manufacturing and Client Services, will continue to lead integration efforts while at the same time leading the manufacturing and client services areas of the combined company. Donald E. McCombs will retain his title of ADVO Executive Vice President and President of Operations. The combined company will be governed by the current Valassis Board of Directors and will continue to be headquartered in Livonia, Mich. ADVO will maintain a substantial presence in Windsor, Conn., where it has three locations.
ADVO
STUDY REVEALS HISPANICS REDEEM COUPONS
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:
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Hispanics use coupons for more than their usual brand purchases. |
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74% of Spanish only/preferred Hispanics say they use coupons and would use them more frequently if they received more. |
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77% of English only/preferred Hispanics sometimes use coupons. |
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55% of bilingual Hispanics at least sometimes used coupons, compared to 45% of Spanish only/preferred. |
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Circular readership is 32% higher among Hispanics than non-Hispanics. |
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40% said they only receive 10 pieces of direct mail a year, and 39% said they want to receive more. |
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.
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CATALINA
MARKETING ACQUIRED BY VALUE ACT FOR $1.7 BILLION
March 8, 2007--Catalina Marketing Corporation (NYSE:POS) announced that it has entered into a definitive agreement to be acquired by an affiliate of ValueAct Capital ("ValueAct Capital") in an all-cash transaction valued at $1.7 billion including the assumption of approximately $135 million of current indebtedness. ValueAct Capital will acquire by merger 100% of the outstanding equity interests of the company that it does not already own for $32.10 per share in cash. Jeffrey W. Ubben, who has served as a director of Catalina since May 2006, is the co-founder, managing partner and principal owner of ValueAct Capital, an investment partnership with approximately $5.0 billion in assets under management.
Under the terms of the agreement, Catalina stockholders will receive $32.10 in cash for each outstanding share of stock. This represents a premium of approximately 32% over the closing share price on December 7, 2006, the last trading day before disclosure of the initial unsolicited expression of interest from a third party private equity firm with respect to the acquisition of the company. Also, under the terms of the merger agreement, Catalina may solicit or entertain alternative proposals from third parties during the next 45 days. There can be no assurance that the company will seek or receive other proposals or, if it does, that the solicitation or receipt of proposals will result in an alternative transaction. Catalina does not intend to disclose developments with respect to this solicitation process unless and until its board of directors has made a decision to enter into an alternative transaction.
The company previously disclosed that it had engaged Goldman, Sachs & Co. as its financial advisor. The special committee has also retained Lazard, to assist it in connection with its deliberations. Based on its consultations with these firms, and following discussions with various other potentially interested parties and other activities, the special committee and the entire board of directors of the company have approved the agreement and the board of directors has recommended that the company's stockholders vote in favor of the agreement.
The transaction is expected to close in the next several months and is subject to approval by the company's stockholders, other than ValueAct Capital, regulatory approvals and other customary closing conditions. ValueAct Capital has received customary debt financing commitments from third party financing sources. "With the assistance of our external advisors, after extensive negotiations and careful consideration of a range of alternatives, the special committee and the board of directors have concluded that the sale of the company to ValueAct Capital is the best alternative for maximizing value for existing shareholders," said Frederick W. Beinecke, chairman of the special committee and of the board of directors. "ValueAct Capital is a leading investment company with a strong reputation and a proven track record."
Jeff Ubben said, "ValueAct Capital has been an investor in Catalina Marketing since 2003, and today is proud to be the company's largest shareholder. Catalina has an impressive portfolio of businesses, unique products, strong cash flows and a highly skilled employee base. We are strong supporters of Dick Buell and his management team. We are really looking forward to building on Catalina's strong foundation and are very excited to work with management and the company's employees to achieve its long term strategy."
Dick Buell, chief executive officer, said, "We are excited to secure a transaction with owners that support our vision and are committed to its execution. As a board member and long-time shareholder, Jeff Ubben has always been highly supportive of management's vision for the company and we are all looking forward to working with Jeff and his team as the company moves into its next phase of growth and development. With ValueAct Capital's deep understanding of our business, its extensive experience and tradition of assisting in the growth and development of its portfolio companies, we could not ask for a better financial partner."
AVERAGE FSI FACE VALUE UP 8.6% IN FIRST HALF OF 2006
During the first six months of 2006,
the average face value of Free Standing Inserts (FSIs) increased 8.6 percent to
$1.18 vs. the same period in 2005. It is the largest average face value for a
half year period on record. According
to the Marx Promotion Intelligence FSI Trend Report, this trend is being fueled
primarily by the expanded use of FSI coupons for high-value products
increasingly being added to the grocery channel. Face values for high-value
products averaged $4.07 during the first half of 2006, up 20% from the same
period in 2005. "Marketers
continue to leverage FSIs to provide impression value and reach while delivering
consumer incentive and brand messaging," said Mark Nesbitt, chief operating
officer, Marx Promotion Intelligence/ TNS Media Intelligence. "However, it
is evident that high-value consumer promotions have emerged as an effective
tactic as innovative new products are introduced and traditional retail channels
continue to blur."
High value products using FSIs include many personal care items and household
cleaning products. Examples include: teeth whitening kits (Colgate Simply White,
Crest Night Effects and Crest WhiteStrips), diabetes care (OneTouch Blood
Glucose Monitoring System), portable air treatment systems (Febreze ScentStories,
Air Wick FreshMatic, Glade Wisp), and disposable toilet cleaning systems (Clorox
Toilet Wand, Scrubbing Bubbles Fresh Brush).
In the first half of 2006, average face values of coupons rose 10.9% across all non-food segments, versus same period 2005. The household products category led this trend with a 22% increase to $1.11 driven by expanded activity in support of high-value products. Coupons for non-food items decreased 2.7 percent versus record levels in the first half of 2005. Personal care and household products segments had slight increases in coupon distribution of 0.4 percent and 0.3 percent respectively, while the health care segment had a decrease of 7.9 percent. Average face values of coupons among food categories rose 2.2 percent to $0.82, led by refrigerated foods with an 8.2 percent increase to $0.74. The cereal category posted a 7.1 percent decline to $0.83. Coupons for food items decreased 6.5 percent versus record levels last year, although refrigerated foods had a 3.9 percent increase in coupon circulation.
During the first half of 2006, more than 130 billion coupons were delivered via FSIs in Sunday newspapers. The amount was down 4.2 percent from the same period in 2005, which was the most active six-month period on record for FSI activity. This decrease in coupons corresponds with a 2.2 percent decrease in total pages.
Through the Coupon Council, PMA gathers statistics about the coupon industry. Here are some of them:
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Three of four (76%) of U.S. consumers use coupons. |
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Shoppers save nearly $3 billion annually by using coupons. |
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CPG manufactures offered more than $300 billion in coupon savings in 2004. |
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Coupon users report an average of 11.5% savings on their grocery bill with coupons. |
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Nearly half of retailers (46%) reported offering shoppers some form of a bonus coupon program in 2004. |
IDENTITY THEFT LOSSES DECLINE
BY 12 PERCENT IN 2006
Dow Jones Newswires, Published February 2, 2007 - While
identity theft remains a multibillion-dollar problem for businesses and
individuals, incidents of this type of fraud dropped last year. U.S.
identity-theft losses declined in 2006 by 12 percent from the previous year,
$55.7 billion to $49.3 billion, according to the third annual survey by Javelin
Strategy & Research, a research firm in specializing in financial services
and payments. The survey, which involved 5,000 telephone interviews, estimated
that the number of victims dropped for the fourth consecutive year, down about
500,000 to 8.4 million persons.
Researchers attributed the decline to better consumer education and awareness,
as well as increased use of online banking and financial sites that allow
individuals to monitor their accounts more frequently."Businesses are doing
a lot more, law enforcement is doing more and so are consumers," said James
Van Dyke, president of Javelin.
Tena Friery, research director at the Privacy Rights Clearinghouse, a non-profit
consumer organization in San Diego, said she was surprised by the size of the
decline, but she noted there is much greater public awareness about the problem.
"We still have a long way to go," she said. "We really do stress
that it's not all the consumer's fault."
According to the report, there was a significant reduction in fraudulent
new-account openings, traditionally one of the most common types of identity
theft. It occurs when a criminal uses a victim's personal data to open an
account. The survey also found that it took on average less time and expense to
resolve a fraud case than the previous year.
CIC
PROPOSES ADDING HOLOGRAM TO DETER GROWING COUNTERFEITING
The Coupon Information Corporation (CIC) is urging CPG manufacturers to add a special hologram to their Free Product and high-value coupons to deter counterfeiting. The proposed implementation date for this Voluntary Best Practice developed by the CIC is Sept. 1, 2006. "Counterfeit coupons have cost manufacturers millions of dollars and have created numerous costs and challenges for retailers. It is hoped that this Best Practice will provide a reasonable, cost-effective solution for the entire industry," said Bud Miller, executive director, CIC, Alexandria, Va.
The anti-counterfeiting device is a
hologram designed to enhance the standard "Manufacturer’s Coupon and
Expiration Date" wording on a coupon. The words are legible when viewed
directly. When the coupon is titled slightly and viewed, a bright diffractive
security image (the CIC logo) covers up the words "Manufacturer’s
Coupon" and the actual expiration date. In the "Terms and
Conditions" listed on the coupon, CIC recommends adding a statement that
the coupon is valid only if it has a hologram on it. Two suggestions: "Void
Without Hologram" and "Security Feature: Hologram."
CIC is making the artwork of the hologram available free of charge to all
product manufacturers, whether they are CIC members or not. To receive an
electronic image of the CIC logo for use as an anti-counterfeiting device,
contact CIC at (703) 684-5307. "A company has just done a prototype that we
passed on to our members," he said. "Several manufacturers are
aggressively working to implement it. Our recommendation is that they should
start hitting the market in September. "There will be some transition
time," he continued. "We hope it becomes a universal practice over the
next year. Obviously, we have no magic wand to make that happen. We have letters
out to about 250 manufacturers. It is a voluntary practice, but the more
companies that use it, the more secure it will be. This is the first time we are
doing anything like this. But the counterfeiting problem is growing and it needs
to be stopped in a systemic way."
The Voluntary Best Practice has been endorsed by the Association of Coupon
Professionals (ACP) and praised by industry experts. "It is a way to allow
for high value coupons to be distributed and decrease the possibility of
counterfeiting. It will require a strong industry push to get the word out to
manufacturers, retailers and consumers to make this practice work. But it allows
the industry to continue to provide incentives directly to consumers to use
products," said John Irwin, president of ACP. Charles Brown, vice president
of marketing for NCH Marketing Services, said the CIC should be commended for
taking a leadership approach in developing the best practice hologram. "We’ll
suggest it to any clients who choose to issue free coupons in appropriate
media," he said. "In reality, with all the formats of coupons in
circulation, a hologram on what is hoped to be most free coupons still won’t
be fool-proof for cashiers, but hopefully it is a deterrent against
counterfeiters even attempting to pass a bogus free coupon. "There
is no panacea solution," he added, "but continued diligence with
coupon design best practices such as the CIC’s hologram recommendation,
increased investment in fraud detection and prosecution, and greater consumer
awareness will go a long way to enhance the deterrence effect needed for a
healthy industry."
According to Miller, counterfeit coupons over the years have ranged from
amateurish home-made versions to high-quality, professional ones virtually
identical to those issued by manufacturers. "Unfortunately,
even the amateurish coupons are often accepted for redemption, creating
liabilities for a variety of industry participants," he said. "Once a
counterfeit is accepted, someone -- whether it is a manufacturer or a retailer
-- is going to have to pay for it, creating uncontrollable liabilities and
unnecessary trade relations issues." Counterfeiters have forced retailers
to be more aggressive in reviewing coupons at the check out lane, according to
Miller. The increase in front-end security procedures has created consumer
discomfort, increased costs, and lengthened lines. "There are a number of
anti-counterfeiting techniques available to the industry," he said.
"The effectiveness of these techniques varies. However, the number of
potential solutions means that cashiers are seldom trained in all of the
available loss prevention techniques. Any anti-counterfeiting solution should
increase overall cashier efficiency and reduce consumer challenges by being
instantly recognizable." Miller said some manufacturers have recently begun
using foil technologies to print entire coupons. Since these can reasonably be
considered to be counterfeit resistant, a hologram is not necessary for these
types of coupons.
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NATIONAL
COUPON MONTH SPURS AWARENESS FOR CPG MARKETERS
National Coupon Month in September aims to educate consumers about coupons. At the same time, CPG marketers and retailers will benefit from increased awareness of the promotion industry’s most used tactic. "National Coupon Month is a celebration of coupons," said Claire Rosenzweig, CAE, president of the Promotion Marketing Association (PMA), the trade group that developed the promotion. "It’s the time of the year to celebrate the power of coupons as part of the promotional mix and within an integrated marketing communications plan."
Consumers can find information about coupons at the National Coupon Month Web site, www.couponmonth.com. There are tips ranging from making coupon-clipping a great math and savings lesson for the kids to using coupons with shorter expiration dates first to stock up on necessary items. The site is a year-round resource for those looking to maximize their savings and shop smart with coupons. Rosenzweig said heightened consumer awareness of coupons eventually results in increased usage, which benefits manufacturers and retailers. "We want marketers to understand the best way to utilize coupons," she said. Through the PMA Coupon Council, "we try to help marketers understand the role of coupons in the overall integrated marketing mix and how they can be used as part of an integrated marketing plan to help build the brand."
Meanwhile, PMA’s new Retail Council is ramping up its activity as well. "We’re trying to help retailers understand how promotion as a whole can be used to drive traffic to the store. And certainly coupons are a critical element to that," she said. Rosenzweig encouraged CPG manufacturers to enhance their involvement with coupons by joining the PMA Coupon Council. "We welcome these companies as members of the PMA so they can tap into our resources. We encourage them to link to the National Coupon Month website – there’s a logo for it – and to literally get on the bandwagon."
Through the Coupon Council, PMA gathers statistics about the coupon industry. Here are some of them:
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Three of four (76%) of U.S. consumers use coupons. |
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Shoppers save nearly $3 billion annually by using coupons. |
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CPG manufactures offered more than $300 billion in coupon savings in 2004. |
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Coupon users report an average of 11.5% savings on their grocery bill with coupons. |
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Nearly half of retailers (46%) reported offering shoppers some form of a bonus coupon program in 2004. |
COUPON DISTRIBUTION INCREASES 10% FOR 2005
Coupon redemption declined 6% in 2005, while distribution increased 10% last year to 323 billion coupons. For several years, coupon face values have increased 8-9%, compared to the 1-2% in prices. The average coupon value is $1.16. Overall, coupon distribution is up 10%, with 6% for non-food categories and 3% for food coupons. Meanwhile, redemption is up 20% for food, but down 29% for non-food categories. The number of coupons requiring multiple purchases is down. In the non-food category, consumers are 30% more likely to use a buy-two coupon than a buy-one. In food, they are actually 14% more likely to use a buy-four than a buy-one. And overall, across food and non-food consumers are 49% more likely to use buy-four and 18% more likely to use buy-three than to use a buy-one. Most of the increased redemption can be seen with in-store coupons as about a third of redemption’s are from in-store distribution. The Internet accounts for less than 2/10ths of a percentage of coupon distribution and redemption, however, they are reaching their targets.
Minority group such as Hispanics and African-Americans are undeserved markets in terms of coupons. CPG marketers are seeking consumers more than ever before by using targeted distribution methods. Marx Promotion Intelligence reports that during the first six months of 2006, Free Standing Insert (FSI) average face value increased 8.6 percent to $1.18 versus the same period in 2005. It is the largest average face value for a half year period on record. This trend is being driven primarily by the expanded use of FSI coupons for high-value products which are increasingly being added to the grocery channel such as Teeth Whitening Kits, Diabetes Care Products, Portable Air Treatment Systems and Disposable Toilet Cleaning Systems. Face values for high-value products averaged $4.07 during the first half of 2006, up 20 percent from the same period in 2005.
IDENTITY THEFTS COSTS CONSUMERS $57 BILLION IN 2005
Consumers in the United States lost $57 billion in 2005 to criminals who stole their identities according to a study by the Council of Better Business Bureaus and Javelin Strategy & Research. It revealed that identity theft cost U.S. consumers 4% more in 2005 than the $54.4 billion it cost in 2004. The average fraud rose to $6,383 from $5,885. The 8.9 million Americans who learned that criminals had stolen personal data and used it to commit fraud fell 4%, from 9.3 million in 2004 and 10.1 million in 2003. Data showed that people who were younger and had lower incomes were more vulnerable.
Unfortunately, it is not very difficult to commit identity fraud. There are several ways that the thieves commit identity theft such as Internet fraud, "phishing," a much-publicized practice where criminals send e-mails asking prospective victims to verify personal data through links to real-looking, but fake, web sites. In addition, victims lost data because their wallets, checkbooks, credit cards that were lost or stolen, victimized by family members, friends, acquaintances, or fellow employees, and stolen or misdirected mail.
In general, people whose incomes were less than $35,000 reported larger frauds, though people who earned $75,000 to $100,000 a year reported the biggest average fraud totaling $9,978. The median fraud totaled $750, unchanged from a year earlier. The survey found that "Generation X," which it defined as people aged 25 to 34, are more at risk than older people, perhaps because their "more active lifestyle" encourages fraud. The survey said a typical fraud costs $422 and takes 40 hours to fix. While fraud takes an average of 84 days to detect, 40% of cases are resolved within one week.
Consumers can protect themselves by closely monitoring their credit reports, personal accounts, and reviewing mail that contains financial statements. Putting fraud alerts on credit reports is an effective way to thwart future fraud. Monitoring your account activity is a crucial early discovery point for possible fraud.
Please Note Illinois has formed a new hotline for residents to report identity theft and take steps to repair their credit and prevent future problems. Attorney General Lisa Madigan said the line is designed to provide immediate counseling. Illinois residents can reach the hotline by dialing (866) 999-5630. For the hearing-impaired, the TTY number is (877) 844-5461.
Marketers Offer Additional $37 Billion in Coupon Savings in 2005
February 3, 2006: CMS, Inc., announced that coupon distribution increased 10% in 2005. Distribution now stands at 323 billion coupons, nearly a 30 billion-coupon increase versus a year ago. About 88% of these coupons were distributed via Sunday newspapers (free-standing inserts or FSIs). "The very fact that brands put an extra $37 billion in coupon savings on the table proves that they're seeing the value in this type of promotion," said coupon industry analyst and CMS's Director of Marketing, Matthew Tilley. "They're obviously counting on and getting advertising value, retail support and direct sales improvements. Otherwise, we'd see them cutting back."
CMS reported that coupon redemption
fell 6% last year, meaning that consumers redeemed 3 billion coupons at retail
stores across the United States, compared to 3.2 billion in 20
Longer-term trends, such as changing consumer demographics, seem to have the most impact on consumer response, yet are the most difficult to affect. "Just look at the Hispanic population as an example. They make up over 12% of the U.S. population, yet represent less than 8% of coupon users," said Tilley. "And that gap is only going to increase if that ethnic group grows according to predictions."
BUY ONE GET ONE FREE COUPONS INCREASE
MINNEAPOLIS (January 31, 2006) - Freestanding insert coupons for buy-one, get-one-free offers increased 48% to 9.4 billion from in 2005 vs. 2004, according to a new white paper from Marx Promotion Intelligence/TNS Media Intelligence. Of this, BOGO coupons for household products, dry grocery and health care grew 63%. BOGOs for nonfoods soared nearly 80%, thanks to more offers from Procter & Gamble, Reckitt Benckiser and S.C. Johnson & Sons. Overall, the average BOGO face value grew to $3.33, a 118% jump from 2002, according to the report. The average face value for a nonfood BOGO currently stands at $4.57, vs. $1.75 for food. The most popular type of BOGO is "buy-two, get-one-free," representing 45% of all BOGO coupons.
ID THEFT RING DISCOVERED BY RESEARCHERS
Spyware researchers dissecting one of the more notorious spyware programs have stumbled upon what appears to be a massive identity theft ring hijacking confidential data from millions of infected computers. Sunbelt Software Inc., makers of the enterprise-grade CounterSpy spyware protection product, made the discovery during an audit of "CoolWebSearch," a program that routinely hijacks Web searchers, browser home pages and other Internet Explorer settings. During the research, Sunbelt researcher Patrick Jordan deliberately installed the "CoolWebSearch application on a machine and immediately noticed that the infected system became a spam zombie that was placing callbacks to a remote server. When Jordan visited the remote server, he was shocked to find that it was being used to distribute sensitive personal information from millions of PC users infected by the spyware application.
"We found the keylogger transcript files that are being uploaded to the servers. We're talking real spyware stuff…chat sessions, usernames, passwords, bank account information, full names, addresses," said Sunbelt president Alex Eckelberry. He said the sophistication of the operation suggests it's the work of a "massive identity theft ring" that used keystroke loggers to grab confidential information that could be used to create fake online identities. As the [log] file gets to a certain size, it gets taken down and a new file starts generating. This goes on nonstop. We've been watching it for a few days while trying to get to the FBI, and it just keeps growing and growing. While the site is being hosted in the United States, Eckelberry said the domain name is registered to an offshore company.
"This won't get caught by a typical anti-spyware application," he said, noting that the keystroke logger was able to pick up identity-related data for delivery to the remote server. Anti-virus vendor Trend Micro Inc. provides a free online scanning tool that detects and deletes the "CoolWebSearch" application. The tool is available for the Microsoft Windows XP, Windows 2000, Windows Millenium Edition and Windows 98 operating systems.
COUPON DISTRIBUTION INCREASES 9% WHILE REDEMPTION DECLINES 10%
According to the 2005 CMS coupon trends book, coupon distribution grew by 9% to 342 billion coupons. This is attributed to the launch of more than 1,300 new products in the general household products category along with increases in the non-food category. Coupon redemption dropped 10% to 3.2 billion. Sixty-nine percent of consumers surveyed said they still "frequently or almost always check or clip coupons." Total coupon redemption has decreased 27% from 4.4 billion coupons in 2000 to 3.2 billion in 2004. FSIs still make up over 82% of the coupons distributed and 67% of the coupons redeemed, a redemption rate of 0.78%. The average coupon face value of distributed coupons increased from $0.81 in 2002 to $0.93 in 2004. And the multiple purchase requirements and average expiration period have stayed the same (27% and 3 months, respectively) over the last three years.
Electronic checkout coupons only made up 1.1% of the distributed coupons but account for 7.3% of the total redeemed coupons and had a redemption rate of 6.41% while Electronic Shelf coupons made up 0.6% of the distributed coupons and accounted for 3.6% of the total redeemed coupons and had a redemption rate of 6.29%. Other methods of couponing with higher redemption rates included electronic discount (10.51%); instant redeemable (18.54%); military handout (10.16%); and military shelf pad (26.5%). CMS suspended reporting on Internet coupons due to the divergent methods of reporting coupon distribution quantities.
CPG'S ENHANCE COUPON OFFERS
NEW YORK (July 27, 2005) - Manufacturers are trying to entice shoppers through more freestanding inserts and better offers, according to a report from Marx Promotion Intelligence. The number of coupons distributed in the first half of 2005 rose 2.3% over the year-ago period. Total pages increased 5.9%, average coupon face value grew 6.7% to $1.09 and the average offer duration increased after several years of declines. The number of dry grocery coupons fell 10.9% on decreases in the candy and soup categories, and average face value of food item coupons rose 5.3% to 80 cents. Marx is a division of TNS Media Intelligence, based here.
COUPON USE DECLINES IN 2004
Shoppers redeemed fewer coupons in 2004, even as manufacturers distributed 9% more of them, for a total of 342 billion, according to CMS here, which settles coupon transactions for manufacturers. CMS cited competition in household products categories as a major factor in the distribution increase. As baby boomers age and become empty-nesters, though, their coupon use falls off, a major reason why redemption fell 10% last year, to 3.2 billion, according to CMS. Other factors that may discourage coupon use, according to CMS: 27% of coupons require multiple purchases, and the average time to redeem a coupon last year remained stable at three months. More than 82% of coupons were distributed via freestanding newspaper inserts.
$800,000 COUPON FRAUD, MONEY LAUNDERING AND THEFT BY DECEPTION
New Jersey officials charged Jordanian-born Abdellatif Yasin Aljuneidi, 38,
with first-degree money laundering and theft by deception. Aljuneidi is at large
after posting a $400,000 bond and missing a March court date. He faces up to 30
years in state prison and a fine up to $650,000, according to the state.
Aljuneidi allegedly convinced dozens of retailers to participate in a
"redemption program" that gave storeowners cash payments for
misredeeming manufacturer coupons. He allegedly sent fraudulent applications to
an undisclosed coupon clearinghouse, grossly inflating the size of participating
stores and their coupon-related sales in order to explain the large amount of
coupons submitted for redemption by each store. The submissions on behalf of 17
stores netted $800,000 in reimbursement from the clearinghouse. Aljuneidi
allegedly demanded 50% or more of the reimbursements from retailers, whose
stores were ineligible for redemption funds.
The Money Laundering Section of the Financial Crimes Bureau worked with
non-profit Coupon Information Corporation to uncover the scheme running in New
Jersey, New York, Pennsylvania and South Carolina from April 2000 through
October 2003.
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ID THEFT ANT INTERNET FRAUD COMPLAINTS CONTINUE TO GROW
Consumer fraud and Identity theft complaints in the U.S. increased 17 percent in 2004 with ID theft the leading category for the fifth consecutive year according to the Federal Trade Commission. The FTC said the number of complaints rose to 635,173 from 542, 378 in 2003. Consumers reported fraud losses of more than $547 million in 2004 with a median individual loss of $259. Identity theft represented 42 percent of all complaints in 2003, up from 40 percent the year before. The most common cases of identity theft involved credit cards, followed by telephones or utilities, banks and workplace fraud. Internet auctions represented 15 percent of the complaints; shop-at-home/catalog sales accounted for 9 percent; and Internet services and computer complaints made up 6 percent. Other top categories included prizes, sweepstakes and lotteries; foreign money offers and advance fee loans and credit protection. Overall, 516,740 consumer complaints were filed last year, up from 404,000 in 2002.
Internet auctions were the second largest complaints. Reports of Internet-related fraud now account for more than half the consumer complaints filed with the Federal Trade Commission. Internet-related fraud was the subject of 55 percent of the more than half-million complaints filed in 2003, up from 45 percent a year earlier, the FTC said. The median loss for victims of Internet-related fraud was $195.
MARX STUDY REVEALS THAT THE AVERAGE FACE VALUE OF FSI COUPONS REACHES $1.03
The average face value of coupons distributed within newspaper free-standing inserts (FSIs) in 2004 hit $1.03, compared to 95 cents in 2003, representing an 8.1 percent increase according to the Marx Promotion Intelligence 2004 FSI Trend Report. The increase in coupon values is attributed to new product introductions and an increase in coupon values for both food and nonfood items. Manufacturers of items of higher retail value issued introductory coupons with values far beyond those of traditional packaged goods, according to the study. Coupon values for both food and nonfood items increased in 2004. In nonfood, which was the largest sector of coupon distribution in 2004, average coupon face value increased 11 cents to $1.26. Food categories also realized higher average face values, up two cents to 78 cents, a 2.8 percent increase vs. 2003. Coupon use was on the rise in 2004 as 251 billion coupons were distributed within newspaper Free-Standing Inserts, a 7.7 percent increase compared with 2003, according to the annual Marx FSI Trend Report. The report estimates that more than 850 FSI coupons were issued for every U.S. citizen, with potential per-person savings of nearly $1,000.
YALE/CORNELL STUDY SAYS SLOTTING FEES SUPPORT EFFICIENCY IN THE MARKETPLACE
Retailers, manufacturers,
and regulators have debated for years over the impacts of the controversial
practice of slotting allowances (the fees manufacturers pay to retailers in
exchange for shelf space to stock new products in warehouses and stores).
Researchers at the Yale School of Management and Cornell University concluded
that slotting allowances do support efficiency in the marketplace. Their report,
"Are Slotting Allowances Efficiency-Enhancing or Anti-Competitive?"
revealed that they obtained a unique data set consisting of all new products
that were offered to a large supermarket chain in a six-month period. It
captures more than 1,000 product offers in 21 categories, from major
manufacturers such as Kraft, General Foods, Procter & Gamble, as well as
smaller manufacturers such as Seneca Foods.
The researchers, K. Sudhir of the Yale School of Management and Vithala R. Rao
of Johnson Graduate School of Management at Cornell, said their data offers both
objective information about the new product introductions, including test market
results, promotional support, and offers of slotting allowances; and how the
retail buyer in question rated the manufacturers and the products. Their
findings support the rationale that slotting allowances help enhance market
efficiency, by optimally allocating scarce retail shelf space to the most
successful products; and that the fees do not thwart competition. They said the
data shows slotting allowances help balance the risk of new product failure
between manufacturers and retailers; help manufacturers signal private
information about potential success of new products; and serve to widen retail
distribution for manufacturers by mitigating retail competition.
I think that the reason traditional grocery distribution companies are losing
ground to Wal-Mart is because they have attempted to make money buying goods
rather than selling goods, with slotting fees, failure fees, reclamation center
fees, general ad funds, etc. Many manufacturers that find it much more
profitable to do business with Wal-Mart and avoid these fees.
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INMAR ACQUIRES VSI TARGETING
WESTPORT, Conn., February 1, 2005 – Inmar, Inc., a business process outsourcing company, announced today its acquisition of VSI Targeting. The partnership brings together the resources of Inmar, the largest provider of outsourced promotional transaction settlement and management through its CMS and Carolina Services units, with the specialized abilities of VSI Targeting, a company that uses couponing expertise and proprietary software to help marketers optimize coupon offers. "Our clients look to us for ideas and information to help them do their jobs better, and VSI is a natural fit. We can provide important resources to fuel VSI’s growth while helping our clients become more efficient and effective," said John Whitaker, Inmar’s Chairman and Chief Executive Officer.
VSI Targeting now becomes a subsidiary of North Carolina-based Inmar but will continue to operate independently from its headquarters in Westport, Conn. Phil von Stade, President of VSI Targeting indicated that this structure will support continued excellent service for all clients. "This partnership underscores our commitment to providing consistent service to our existing clients," said von Stade. "In fact, over the long term, it will allow us to do some very exciting things and grow the business in ways that we wouldn’t have been able to do otherwise."
VSI Targeting focuses on assisting marketers to optimize coupon promotion offers, particularly Free-standing Sunday Inserts (FSIs). The 11 year old company delivers the Coupon Optimization Process through its Opti-List, Opti-Value and Opti-Mega products. The firm’s client roster includes the manufacturers of some of the world’s best-known brands, including Campbell Soup, Land O’ Lakes and Unilever.
FTC issue its report, The Use of Slotting Allowances in the Retail Grocery Industry
The FTC has issued its report, The Use of Slotting Allowances in the Retail Grocery Industry. Back in September 2000, the Federal Trade Commission (FTC) was asked to conduct a study of the use of slotting allowances to determine if these fees provided an unfair competitive advantage to retailers or manufacturers doing business in the grocery industry. The 119-page study, "Slotting Allowances in the Retail Grocery Industry: Selected Case Studies in Five Grocery Categories," examines in detail the slotting-fee practices in five categories (fresh bread, hot dogs, ice cream, pasta and salad dressing) of seven unnamed supermarket companies, six manufacturers and two food brokers, all of which participated voluntarily.
Here are some of the report's key findings.
| Slotting fees for the national
introduction of a new product could range from a little under $1 million to
more than $2 million. |
| Slotting fees were less likely to be
paid for products distributed through direct-store delivery and more likely
if products passed through the retailer’s warehouse; |
| Frozen and refrigerated products
tended to have higher slotting fees; |
| For some products, slotting fees
surpassed product revenues; |
| Pay-to-stay fees were rare in the
product categories studied. |
| Slotting allowances are only one of
a series of payments and/or credits retailers receive from manufacturers to
carry products in stores. |
| Some retailers say they do not
accept slotting allowances although other monies for promotion, etc. seem to
serve essentially the same purpose. |
| Retailers say they need the
allowances to offset the costs associated with new product failures and
increased labor costs. |
| Retailers and manufacturers disagree
on how much is actually paid to the retailer for shelf space. |
| Th |
