Monday, April 13, 2015

Major Retailers Post Double-Digit Increases in Digital Offers

CPG digital coupons distributed on retailer websites benefited from double-digit increases in 2014 versus 2013, according to data released by Marx, a Kantar Media solution.

Kroger, Walmart and Walgreens led their respective channels. Kroger scored a 29.1 percent increase in digital coupon events to lead grocery retailers, while Walmart finished the year in first place in the mass channel with an 18.4 percent increase. Walgreens led the drug channel with a 110.3 percent increase.
  
“Digital coupons distributed on a retailer’s website provide relevant incentives to shoppers who are likely planning a trip to that retailer,” said Dan Kitrell, Vice President of Marx Account Solutions at Kantar Media.

The findings were based on retailer websites monitored by Kantar Media. The digital coupon statistics were part of an overall study that also included retailer advertising expenditures, FSI promotion pages, and feature ad pages. The analysis gives cues on how CPG manufacturers can gain a competitive advantage by timing their programs to align with when retailers have greater advertising and promotion activity.

Significant shifts in advertising and promotion activity were observed among leading retailers across the mass, food, drug, and other retail sales channels. For example, Walmart dominated the battle for “share of voice” with retail shoppers by maintaining the greatest level of actual advertising expenditures and the highest level of participation in retailer FSI promotion pages. Walmart also increased their consumer promotion activity with a 15.7 percent increase in FSI promotion pages and an 18.4 percent increase in digital coupon events on Walmart.com in 2014.
  
In contrast, Target had the second highest levels of advertising expenditures and retailer FSI promotion pages behind Walmart, but decreased advertising 6.1 percent, decreased FSI promotion pages 11.1 percent, and decreased digital coupon events on Target.com by 36.6 percent in 2014.  These shifts in advertising and promotion may ultimately translate into shifts in share of shoppers, trips, and sales between these two leading retailers.

Interestingly, each of the three leading drug channel retailers increased their advertising activity while several leading grocery retailers decreased their advertising expenditures in 2014.  FSI coupon pages and digital coupon events grew for most of these leading retailers while changes in retailer feature ad pages was mixed in 2014.

CVS had the greatest percent increase in retailer advertising activity among the merchants analyzed – up 10.3 percent versus 2013.  CVS also increased their participation in retailer FSI promotion pages by 47.2 percent, digital coupon events by 23.8 percent, and retail feature ad pages by 4.6 percent.
  
“These retailer trends may reflect several factors including retailers exiting select markets, the sale of retail banners, or a response to retailer-related news stories.  However, aggregated annual trends may not tell the whole story,” said Kitrell.
  
“Retailers compete to win shoppers and trips on a weekly basis. Manufacturers may be able to gain a competitive advantage by aligning their program timing with specific weeks in which a retailer has greater advertising and promotion activity. Timing becomes even more important if the retailer decreases total activity for the year. By identifying key weeks and key categories at key retailers, manufacturers can improve their program effectiveness during critical selling seasons, new product introductions, and other key initiatives throughout the year,” concluded Kitrell.  

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