Coupon use is returning to modest growth, with digital distribution driving some of the activity. The CPG Coupon Industry Facts, a half-year report by Valassis unit NCH Marketing Services, shows that growth is being driven by a number of factors extraneous to food and traditional media.
Overall, digital is seeing double-digit growth in distribution and redemption. That fact, along with a post-recession correction, is slowing overall redemption declines. Still, digital notwithstanding, free-standing inserts (FSI) stay ahead of the game, with 91.1% share.
Overall the study shows a 1.8% increase in coupon distribution, driven by an increase in the non-food segment, which is also increasing multiple purchase requirements, per the study. In the first half of 2013, coupons for non-food products represented 62.5% of all coupons distributed, a 2.9% increase from the first half of 2012. Overall, CPG manufacturers issued 168 billion coupons in the first six months of 2013, per the study.
Suzie Brown, Valassis EVP of sales and marketing, said that even though CPG marketers still turn mostly to FSI, “At the same time, they are also expanding the use of digital formats that continue to grow but on a smaller scale. For marketers, it’s about finding the right media mix and defining the coupon characteristics to both activate consumers and still drive ROI for their brand.”
The study shows that marketers are shortening the lifetime of coupons by 3.2% to 9 weeks on average, led by the food segment where expiration dates were reduced by nearly one week; they are using more coupons requiring the purchase of two or more products, particularly for food items, which represents 42%, per the report; and they are Increasing the average face values distributed by 4.5% to $1.62, driven by non-food segment marketers.
The study says that redemption has dropped 8.1% in the first half because of the changes. Digital coupon formats have seen redemption hit 6.1% for print-at-home coupons, and 2.5% percent for paperless formats.