FSI Couponing At Record Level

by , Jan 19, 2010, 8:15 AM
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According to Marx Promotion Intelligence, a division of TNS, free standing insert (FSI) coupon activity increased 8.0% during 2009 versus the previous year to more than 272 billion coupons dropped.  This activity level is the highest yearly coupons dropped observed during the past decade, surpassing the second highest annual coupons dropped of 257 billion realized in 2007. In addition, retailer promotion pages also achieved new record levels with a 37.7% increase to more than 9.0 billion pages in 2009.

Mark Nesbitt, President, TNS Media Intelligence,  "... although ‘shopper marketing' tactics are still evolving, FSIs have clearly emerged as a key component of manufacturer and retailer aligned promotion programs... manufacturers are using corporate scale FSI coupon events... to break through the promotion clutter... "

During 2009, more than $385 billion in consumer incentives were delivered via FSI coupons, up 15.0% from 2008.  However, Average Expiration (Fuse) remained below ten weeks with a decrease to 9.3 weeks, down 3.9% versus a year ago.  Manufacturers are delivering more offers of greater value to the consumer, but are managing their financial exposure by reducing the length of time that these offers are available in the market.    

Overall FSI Activity (2009 versus 2008)

Measure

2009%

Change

Dollars Circulated

$385 billion

15.0%

Coupons Dropped

272 billion

8.0%

Pages Distributed

203 billion

4.0%

Face Value (average)

$1.42

6.5%

Fuse (weeks)

9.3

-3.9%

Source: TNS/Marx Promotion Intelligence, January 2010

The Consumer Packaged Goods (CPG) sector remained as the largest user of FSI pages with a 71.5% share, followed by Direct Response, which includes general advertising activity, and Franchise, comprised of restaurants, portrait studios, and other businesses. 

Results by Sector (2009 versus 2008)

Sector

Pages (MM)

% Change

Share

CPG

145,497

6.1%

71.5%

Direct Response

38,797

-5.8%

19.1%

Franchise

19,191

10.3%

9.4%

Total

203,485

4.0%

100.0%

Source: TNS/Marx Promotion Intelligence, January 2010

Retailer promotion pages increased 37.7% to more than 9.0 billion pages in 2009.  Target continued to lead with more than 1.8 billion pages, up 43.9% versus 2008.  Dollar General increased 386.2% to more than 885 million pages to rank third during 2009.  These trends reflect the overall growth of retailer promotion within traditional FSI vehicles.

Top 10 Retailers based on Pages Circulated

Store

Rank 2008

Rank 2009

Target

1

1

PETsMART

4

2

Dollar General

10

3

Walgreens

2

4

CVS/pharmacy

3

5

Family Dollar

17

6

Kroger (banner)

5

7

Publix

7

8

Safeway Food & Drug

9

9

Rite Aid

13

10

Source: TNS/Marx Promotion Intelligence, January 2010

During 2009, there were 388 new products that delivered FSI coupons across 788 event dates as part of their introduction, averaging 2.0 event dates per new product.  This activity is up from 334 new products, 635 event dates, and 1.9 event dates per new product during 2008. 

Top 10 Categories for New Product Activity, 2009

Rank

Product Type

# New Products

1

Snacks

30

2

Alcoholic Beverages

25

3

Cereals

24

4

Milk/Milk Products

18

5

Prepared Food/Frozen

12

6

Household Cleaning Products

11

6

Pet Food & Treats

11

6

Beverages

11

9

Bread Product/Shelf

10

10

Pet Products

8

Source: TNS/Marx Promotion Intelligence, January 2010

In 2009, Non-Food categories distributed more than 160.9 billion coupons, up 5.3% versus a year ago, driven by the 7.7% increase within the Personal Care area.  Food categories distributed 111.6 billion coupons, representing an increase of 12.4%, led by the 7.8% increase for the Dry Grocery area. 

Additionally, manufacturers are increasing the value of the offers being delivered to consumers in both the Non-Food and Food segments.  Weighted average face value for Non-Food increased 7.4% to $1.73 and was combined with a 0.8 point decrease in multiple purchase requirements resulting in weighted average face value per unit increasing 8.1% to $1.54. These changes appear to be a response to economic pressures to increase the perceived consumer value of each offer relative to retail price, concludes the report.

CPG Non-Food vs. Food (2009 versus 2008)

Class

 

Coupons Dropped (MM)

Avg Face Value ($)

Avg Face Value Per Unit ($)

% Multiple Purchase

Avg Duration (weeks)

2009

% Chg

2009

%Chg

2009

% Chg

2009

PtChg

2009

%Chg

Non-Food

160,924

5.3%

$1.73

7.4%

$1.54

8.1%

15.1%

-0.8

8.9

-2.8%

Food

111,642

12.4%

$0.97

7.5%

$0.73

7.3%

38.0%

-0.3

10

-5.3%

Total CPG

272,053

8.0%

$1.42

6.5%

$1.21

6.9%

24.4%

0

9.3

-3.9%

Source: TNS/Marx Promotion Intelligence, January 2010

The top 10 product types based on Coupons Dropped accounted for 34.8% of all FSI coupon activity during 2009.   Combination/Personal products (comprised of Personal Care brands which are promoted across multiple individual Personal Care categories) ranked first and increased 7.5% to distribute more than 13.3 billion coupons.

Top 10 FSI Product Types in 2009 (by Coupons Dropped*)

Rank

Product Type

Coupons Dropped (MM)

 

 

2008

2009

% Chg

Act Chg (MM)

1

Combination/Personal

12,379

13,305

7.50%

926

2

Pet Food & Treat

12,677

13,182

4.00%

504

3

Household Cleaning Products

13,141

11,504

-12.50%

-1,637

4

Snacks

9,949

10,976

10.30%

1,026

5

Rug/Room Deodorizer

7,600

8,837

16.30%

1,236

6

Vitamins

8,275

8,748

5.70%

473

7

Cough/Cold/Sinus/Allergy

7,990

8,146

2.00%

156

8

Hair Care

6,953

7,522

8.20%

569

9

Shaving Cream/Razor

5,355

6,233

16.40%

878

10

AP/Deodorant

5,698

6,229

9.30%

531

Source: TNS/Marx Promotion Intelligence, January 2010

For additional information about this study, please visit Tnsmi-Marx here.

 

0 comments on "FSI Couponing At Record Level".

  1. Bill West from Comcast Spotlight
    commented on: January 19, 2010 at 11:37 a.m.

    Not surprisingly, more couponing/heavier discounting during a recession. Industry spending was well up, but were the results in line? I'm guessing no. Not sure that we live in an age now where coupon-cutting is still it. Same core does it but that consumer is fewer and farther a part these days. Better ways now exist for driving revenue and market share.

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