Thursday, August 22, 2013

CPG Marketers Increase Mix of Coupons, Adjust Tactics

Ticket for free glass of Coca-Cola, believed t...
CPG marketers continued to strategically evolve their assortment of offers, says a new report. The changes included which products are promoted with coupons, how consumers receive them, and various tactical offer-level changes.

The mid-year report from NCH Marketing Services, a Valassis subsidiary, reveals a 1.8% increase in coupon distribution, driven by an increase in the Non-Food segment. 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. The largest volume of coupons distributed in the first half of 2013 was via the free-standing insert (FSI), increasing this medium’s share to 91.1%. 

Digital coupons, which represented less than 1% of all coupons distributed, continued to sustain double-digit growth in 
three ways: 
  • Expanded utilization by marketers 
  • Retailer integration that leverages their relationships with loyalty program shoppers
  • Growing consumer adoption of new savings opportunities. 

“CPG marketers continue to turn to the FSI to drive volume and market share through the significant advertising impact of FSI pages, and to align their offers with retailers that are increasing their use of the FSI,” said Suzie Brown, Valassis Executive Vice President of Sales and Marketing. “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.”

Marketers’ strategic choices and tactical changes included:
  • Shortening expiration dates by 3.2% to 9 weeks on average, led by the Food segment where expiration dates were reduced by nearly one week
  • Extensively using coupons requiring the purchase of two or more products, particularly for Food items, which represents 42% of their coupon distribution
  • Increasing the average face values distributed by 4.5% to $1.62, driven by Non-Food segment marketers, yet they have managed their total redemption liability through the mix of offers made available in the market.

In response to the marketers’ adjustments, redemption volume for the first half of 2013 declined 8.1%. Digital coupon formats, however, have grown, with redemption reaching 6.1% of the total for print-at-home coupons and 2.5% for paperless formats. That growth includes contextual coupon sites, retailer sites and a stronger integration in the media mix with desktop, social and mobile advertising campaigns. The report said integrated campaigns, that companies such as Valassis are using, help marketers engage and activate today’s always-connected consumer along their path to purchase. Overall, consumers saved $1.8 billion in the first six months of 2013.


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