Consumer Coupon Use up 27% in ’09

Annual coupon use is rising for the first time since 1992, according to process improvement company Inmar, and coupon distribution has reached the highest level recorded since the company began tracking trends in 1988. For the first time in 17 years, consumers used more coupons than they did the year before, with 3.3 billion CPG coupons redeemed in 2009, a 27 percent leap from the 2.6 billion redeemed in 2008.

Increased coupon use began in October 2008, when the U.S. financial crisis hit, noted Winston-Salem, N.C.-based Inmar, adding that five successive quarters of double-digit growth in coupon use have followed (based on percentage change from the same period of the previous year).

This higher rate of redemption has come with an increase in distribution. In spite of the poor economy, marketers invested heavily in coupons, boosting the number available to the highest level in more than three decades. Brands issued 367 billion coupons, at an average face value of $1.44, showing that they were committed to promotions last year.

According to New York-based News America Marketing, the News Corporation division that produces SmartSource Magazine coupon inserts and runs the consumer coupon site, the data backs their 2009 observations.

“There has been a noticeable increase in page count over the past year,” said News America Marketing EVP of marketing Jesse Aversano. “Manufacturers understand that in a tough economy, coupons are an effective and efficient way to spend their advertising dollar.”

“Brands saw coupons as a key to maintaining brand strength,” added Matthew Tilley, director of marketing for Inmar’s promotion services division. “If they reduced their promotional presence, they stood to lose sales to lower-priced competitors and store brands — so they doubled down, hoping to create brand loyalty once the economic dust settles.”

News America Marketing also noted an increase in retailer promotion pages in its free-standing insert (FSI), due mainly to the shift in advertising and promotion dollars to shopper marketing initiatives, said Aversano.

Online coupons additionally contributed to the rise in coupon distribution and redemption, with Internet distribution up 92 percent and consumer redemption of these coupons up more than 360 percent.

“The weekly prints from are more than double what we saw a year ago, which was double what our 2007 numbers were,” affirmed Aversano. “However, in spite of the meteoric rise in online and digital couponing, the traditional newspaper-distributed FSI still accounts for 89 percent of all coupons distributed and over half of the coupons redeemed. Consumers expect to find coupons in their Sunday papers, and we’ll continue to be there for them. But they’ll also find us online, in stores, on cell phones and anywhere else that they want to find them.”

As coupon numbers across the board grew in 2009, brands had to mitigate the cost of higher redemption rates by maintaining face values and keeping expiration periods in check. Last year, face values decreased by one cent, reversing a multi-year trend of increasing values. Additionally, expiration periods were shortened by 10 percent last year, following years of virtually no change.

“This is an exciting time to be in the coupon business,” noted Tilley. “Of course, we don’t know how long this upward trend will continue, but it is evident that coupons are back on shoppers’ radar; the economic downturn has instilled a drive to be smart and frugal about spending, and coupons definitely have a role in fulfilling it.”
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