Despite a growing amount of CPG coupons distributed by marketers last year, American consumers redeemed the fewest amount (2.8 billion) in at least 5 years, according to a study from NCH Marketing Services. As a result, total consumer savings on CPG coupons declined by $200 million in 2013, to $3.5 billion, the lowest point since 2008 ($2.9 billion).
Interestingly, while the average face value of a distributed coupon last year increased 7 cents to $1.62, the face value of the average coupon redeemed by a consumer fell a cent to $1.26, also contributing to the overall drop in savings.
As found in 2012, CPG coupon redemption volume dropped across all retailer formats last year. Grocery stores were largely able to stem the tide, with coupon redemption down just 0.7%. By comparison, mass merchandisers saw their volume of redemptions drop by 6.3%, with redemptions at other channels (such as convenience, warehouse clubs, and dollar stores) down by 11.7%.
The top retailers in terms of total volume of redemption were: Walmart; Kroger; Target; Publix; and Walgreens. Each had been in the top 5 in 2012 redemption volume also, with Publix and Walgreens swapping places this past year.
At 91.2% share by distribution volume, free-standing inserts (FSIs) remained the dominant media format by which marketers distributed coupons in 2013. In-store handouts were a distant second at 3.5% of distribution volume, followed by direct mail (1.7%), magazines (1.1%), in/on package and cross-ruff (a coupon on one product redeemable for another ”“ 1%), and the aggregate of all others (including newspapers, handouts away from stores, military distribution and surprisingly, all digital formats ”“ <2%).
However dominant FSIs were by volume, they were less so when looking at share of redemption volume, accounting for 50.8% of total redemptions. In/on pack and cross-ruff accounted for 18.4% of all redemptions, and in-store handouts for 12.6%.
Digital coupons formats are on the rise: internet home-printed coupons accounted for 7.1% of all redemptions, up from 5.6% the prior year, while paperless coupons (C2C and mobile) comprised 3.1% share of redemptions, up from 1.3%.
The following are average redemption rates for some popular CPG offer types:
- FSIs: 0.6%;
- Direct mail: 3.9%;
- Internet print at home: 14.9%;
- Paperless: 8.3%.
About the Data: Coupons distributed and redeemed in the U.S. Consumer Packaged Goods (CPG) marketplace are studied utilizing NCH’s manufacturer client databases, data cleared via its retailer processing operation and other independent sources. NCH’s proprietary methodology utilizes rigorous controls and statistical standards to maintain the integrity of the information contained in its report, as well as, all other information tools supplied by NCH.
Data points from client and market sources are dynamic. As such, projections are based on the most current information available at the time of publication and may be revised in the future. Also, due to rounding, the sum of certain percentages may not equal 100 percent. The scope of the NCH report includes Manufacturer Coupons of all paper and paperless media formats that are most typically funded by CPG marketing budget allocations for consumer promotion. Retailer In-Ad coupons are not included in the report, as they are most often funded by trade dollars. Consequently, In-Ad distribution and redemption are less precisely tracked by manufacturers. C2C is an abbreviation for coupons download to retailer loyalty cards or unique identification numbers. The scale of C2C and mobile coupons is limited by enablement of retailer point of sale systems, currently deployed primarily in the grocery retail channel.
The report also contains various references to the Valassis Shopper Marketing Survey. The data was obtained in August of 2013 in conjunction with Ipsos, a market research firm with expertise in Internet surveys. The sample was derived from an online consumer opinion panel, and all participants were at least 18 years of age and living in the contiguous United States. Consumers were emailed an invitation to participate in the survey and were given three days to complete it. The survey was closed once 1,000 completed responses had been reached. The responses were weighted by factors obtained from national census data to provide appropriate representations of demographic groups at summary levels.