Tuesday, October 2, 2012

Do CPG Brands Welcome the Decline of Double Coupons?

More grocery chains are discontinuing their policy of double couponing. Vons and Ralphs in California are the latest examples. That may disappoint value-seeking shoppers, but it is welcome news for CPG manufacturers.

Why? Doubling coupons diminishes the perceived value of brands, say coupon experts and others who study promotions.  
“From a manufacturer’s perspective, they don’t want to give the impression that their product is “free” all the time with coupons or the product is very cheap with coupons,” said Jill Catalgo, founder of Supercoupong.com. “It may serve to devalue the brand a little bit.”

Many brands don’t actually want their coupons to be doubled, which is one reason why you will see “do not double” printed on many manufacturer coupons, according to Rachel Singer Gordon, author of The Complete Idiot’s Guide to Couponing.The other reason is that brands want to make it clear that they will only reimburse stores for the face value of a coupon.

“When stores double coupons, it allows consumers to purchase their products very cheaply,” she explained. “It devalues the brand and creates a perception of what the brand is worth, causing fewer consumers to go out and buy the items without coupons or at full price. Further, most shoppers are brand loyal to their favorite brands. Double coupons are more of a factor of where to buy those brands than whether to buy those brands.” 

But deciding whether to continue or stop double couponing is not as easy as it seems. By discontinuing double coupons, retailers may be giving up an advantage in particularly competitive markets, explained Matthew Tilley, Director of Marketing for the Inmar Promotion Network. Plus, shoppers have tended to react fairly negatively when doubling stops.  

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