Tuesday, January 22, 2013

CPG Marketers Increase Use of FSIs to Promote New Products

Ticket for free glass of Coca-Cola, believed t...

Makers of consumer packaged goods are ramping up their use of Free Standing Insert (FSI) coupons to promote new products. The move in 2012 followed decreases in new product FSI coupon activity during the past few years. 

According to a 2012 summary by Kantar Retail, the increases were part of the more than 274 billion Free Standing Insert (FSI) coupons distributed. The total represents a 0.8% increase in activity versus 2011. The number of categories participating in new product activity was up from 82 to 93 and the number of new product event dates was up 23.2% to 727 in 2012. The number of manufacturers using this tactic increased to over 190 – a 9.9% increase in 2012. 

“During the challenging economic conditions experienced during the past several years, manufacturers focused more of their FSI promotion support on core brands. However, we are seeing new product innovation increasing and FSI coupon support is a proven tactic for building retail distribution, creating brand awareness, and encouraging trial purchasing for new product introductions,” noted David Hamric, General Manager, Kantar Media Marx. 

Overall, FSI pages increased 1.4% with the  CPG and Franchise sectors increasing 2.4%  and 10.2% respectively, offsetting an 8% decline in the Direct Response sector. FSI coupon support for new products within the CPG sector increased 23.2% versus 2011 while retailer FSI promotion pages also increased 5.2%. 

“Over the past 10 years, FSI coupon distribution has grown by 18%, reinforcing the role that FSI coupons have on delivering advertising impact, retailer alignment, and purchase incentives within an overall marketing mix,” said Hamric. 

Retailer pages increased 5.2% while the number of manufacturers participating in retailer events declined from 390 to 352 
in 2012. 

“Manufacturers and retailers are participating in cooperative events to influence the shopper on their path-to-purchase. However, retailers are increasingly seeking unique or exclusive programs with manufacturers during key promotion weeks and within strategic categories to engage with their shoppers and win key shopping trips,” said Hamric. 

In 2012, the frequency of FSI events increased slightly with activity occurring on 48 of 53 Sundays. The “pre-Super Bowl” promotion week of January 29 had the greatest activity with a weighted average circulation of 134 pages. The weeks of September 30 and the “pre-Thanksgiving” promotion week of November 11 were tied for the second most heavily weighted week with a total of 125 pages during each of these weeks. . 

During 2012, more than $419 billion in consumer incentives were delivered via FSI coupons, down 0.4% from 2011. During the same period, more than 274 billion coupons were distributed within more than 208 billion FSI pages. FSI coupon average Face Value decreased, down 1.2% to $1.53. Average Expiration (Fuse) continued a steady downward trend with a decrease to 7.3 weeks, down 9% versus a year ago. 

Kantar Retail says these trends indicate that manufacturers are managing their financial exposure by maintaining similar levels of coupons distributed but decreasing the purchase incentive and shortening the length of time that these offers are available in the market

The CPG sector remained the largest user of FSI pages with a 74.3% share, followed by Direct Response, which includes general advertising activity, and Franchise, comprised of restaurants, portrait studios, and other businesses. CPG pages distributed increased by 2.4% in 2012 after a 4.4% decline in 2011. 

Retailer promotion pages increased 5.2% and accounted for more than 17.9 billion pages in 2012. Walmart held the top spot with a 47.3% increase to 5.8 billion pages. Walgreens moved up to the second spot with a 42.6% increase to 2.4 billion pages and Target maintained the third spot with 2.3 billion pages. Family Dollar and Dollar General had the largest changes in rank within the top 10, with Family Dollar up 3 spots to 4 and Dollar General down 3 spots to 5

During 2012, there were 348 new products that delivered FSI coupons across 727 event dates as part of their introduction, averaging 2.1 event dates per new product. This activity is up from 291 new products, 590 event dates, and 2.0 event dates per new product during 2011. Cereals had the greatest number of new products in 2012 with a total of 25. Snacks followed with 22 new products and Pet Food & Treats was third with 15 new products.

In 2012, Non-Food categories distributed more than 171 billion coupons, up 4.2% versus a year ago, driven by the 12.5% increase within the Personal Care area. Food categories distributed more than 103 billion coupons, representing a decrease of 4.5%, led by the 14.1% decline for the Refrigerated Foods area. Six of the nine areas defined by Kantar Media reported declines or remained flat in Coupons Dropped during this period. However, three areas, including Other Packaged Goods, Personal Care and Shelf Stable Beverages, posted double digit increases in 2012. 


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