Coupon redemption in the fourth quarter of 2008 grew nearly 10% compared with Q407, the first significant jump in redemption since the early 1990s, according to data from promotions transaction settlement company Inmar.
Consumer response to coupons also remained strong for the year, with 2.6 billion coupons redeemed, the third year in a row at that level, Inmar said.
Weak Economy Spawns Deal Seekers
Not surprisingly, the weak economy played a major role in stemming the steady decline in coupon redemption in the years prior to 2006, Inmar said, adding that reports of record unemployment, drops in consumer confidence and losses on Wall Street were most likely responsible for the rise in volume of coupon use.
While the first three quarters of 2008 saw coupon redemption dip slightly, the 10% increase in Q4 came in the months of November and December, which both saw double-digit redemption growth.
A double-digit increase in the use of food coupons primarily drove the jump in redemption, although non-food coupon redemption also rose by nearly 10%.
Shift from Grocery to Mass Merchandiser
The increase in use also accompanied an unprecedented channel shift in the locations where consumers use coupons.
“For years, nearly 70% of coupons were redeemed in conventional supermarkets,” said Jennifer Mauldin, president of Inmar Carolina Services Revenue Recovery Services. “But in 2008, the mass merchandiser channel saw a 15% increase in redemption overall, made up by a 20% increase in redemption for food coupons and a 13% increase in non-food coupons.”
Coupons redeemed in mass merchandisers now account for nearly 19% of all coupons redeemed, while conventional supermarkets now comprise less than 64% of coupon redemption.
Distribution Methods Change
The methods marketers are using to distribute coupons are changing as well, Inmar said.? 2008 saw an increase incoupons distributed via direct mail, the internet, newspapers, shelf pads and the military.? Other distribution methods are losing favor:
Distribution up 5%
According to Inmar, marketers continue to believe in the power of coupons and have made 5% more coupons available to consumers last year. At 317 billion coupons, distribution is both up from the previous year and back up to levels from a decade ago.
“This high level of distribution, combined with a 9% increase in the average face value and a generally sour economy, make coupon offers more attractive to consumers than ever,” said Bob Carter, president of Inmar CMS Promotion Services. “The question is whether or not consumers will continue to think so in the coming year.”
Coupons Show Strength in Early 2009
Entering the new year, consumers continue to show interest in coupons, redeeming over 9% more in January 2009 than they did in January 2008, Inmar stated.
“While we can’t predict the future, it is safe to say that that the traditional coupon is back in vogue for consumers,” said Mauldin. “Even if the economy turns a corner sooner than later, a combination of factors have put coupons back on the radar of many consumers and introduced some to them for the first time.”
