annual topline view cpg coupon facts

ANNUAL TOPLINE VIEW
CPG COUPON FACTSTM
REPORTED BY NCH FOR YEAR-END 2014
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ANNUAL TOPLINE VIEW CPG COUPON FACTSTM
FOR YEAR-END 2014
NCH COUPON MARKET TREND OVERVIEW . . . . . . . . . . . . . . . . . . 3
DISTRIBUTION TREND DATA CHARTS. . . . . . . . . . . . . . . . . . . . . . . . . . 5
REDEMPTION TREND DATA CHARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
NCH METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
© 2015 NCH Marketing Services, Inc. All rights reserved.
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Marketers’ Coupon Strategies Deliver Increased Consumer
Savings in 2014 While Staying Within Budgets
By Charlie Brown
NCH Vice President, Marketing
Consumer savings rose to $3.6 billion in 2014, as consumer packaged goods (CPG) marketers increased
the average coupon face value available to shoppers, according to NCH’s annual topline view of the Coupon
Facts™ report. Marketers for both food and non-food products strategically offered consumers more savings
value with their coupons while also managing the redemption impact to their budgets.
While both food and non-food marketers increased the average face value available through their coupon
promotions, only non-food increased the total number of coupons distributed in 2014. Additionally, only
non-food received a positive redemption increase. The net effect was a 2.9 percent – or $100 million – overall
increase in consumer redemption savings.
Average Face Values
Distribution
2013
Food Coupons
2014
Redemption
2013
$1.00 $1.06 6.0%
Food Coupons
$0.99 $1.00 1.0%
Non-Food Coupons
$1.98 $2.05 3.5%
Non-Food Coupons
$1.68 $1.72 2.4%
All CPG Coupons
$1.62 $1.72 6.2%
All CPG Coupons
$1.26 $1.32 4.8%
Total Dollars Offered
$510
billion
Total Consumer Savings $3.5
billion
FSI CPG Coupons
$1.63 $1.74 6.7%
$533
billion
% Chg.
4.5%
2014
$3.6
billion
% Chg.
2.9%
Non-FSI CPG Coupons $1.53 $1.46 (-4.6%)
In an effort to work within 2014 budgets, marketers issued a total of 310 billion CPG coupons, down 1.6
percent from the previous year. Marketers achieved a total of 2.75 billion coupons redeemed in 2014, down
1.8 percent, through a strategic combination of media mix, product segment changes, offer tactics and various
forms of retailer support.
The free-standing insert (FSI) remained the dominant coupon vehicle, accounting for 92.2 percent of total CPG
coupon distribution volume, as marketers leveraged the vehicle’s mass reach for its brand-awareness value.
Although digital coupon distribution increased, it remains less than 1 percent of total coupon distribution.
Unlike in previous years, the tactical changes marketers made to coupon offer characteristics were focused
on face value. Average face value distributed rose a healthy 6.2 percent to $1.72, while offer duration fell only
slightly and multiple-purchase requirements were relatively unchanged.
Similar to the recent past, year-over-year variability in the products promoted via coupons affected the annual
trends. In the non-food segment, marketers distributed 3.5 percent more coupons in 2014. This led to
substantially more non-food coupon redemption, which was up 11.4 percent, reversing a prior year decline.
In the food segment, conversely, marketers distributed 10.4 percent fewer coupons and redemption fell by 10.3
percent from 2013. With 43 percent of food coupons requiring the consumer to purchase two or more items,
a drop in redemption volume had an even greater impact on the quantity of product moved with a coupon for
food marketers and retailers.
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The overall reduction in food coupons had the largest impact on retailers in the grocery and mass
merchandiser retailer channels, which experienced a 5.1 and 3.3 percent decline in total redemption volume,
respectively. Yet, the vast majority of redemption – nearly 80 percent – occurred in these two channels.
While retailers and CPG companies have increased investment in digital paperless coupons, it was not enough
to compensate for the other factors reducing total redemption volume in the food segment.
The increase in non-food coupons benefited the drug retailer channel, which saw a 16 percent increase in total
redemption volume during 2014. The smaller “all other” retailers channel, which includes dollar stores, also
saw a similar redemption volume increase.
CPG marketers managed their budgets in 2014 to balance their coupon promotion objectives of consumer
motivation, brand awareness and retailer trading partner support. At the same time, many have also invested
more in the analysis, enhanced controls and risk mitigation areas that were all required to manage their
coupon expenditures and optimize coupon performance to benefit brands, retailers and consumers.
NCH will publish the 50th edition of the Coupon Facts™ report in 2015. For access, and to opt-in to
receive future email notifications, please visit www.NCHResourceCenter.com. More details on 2014’s
coupon trends, including client-exclusive analysis opportunities, may be obtained by contacting your NCH
representative today.
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Annual U.S. CPG Coupon Distribution
Non-food coupons continued to grow in distribution and now make
up two-thirds of total CPG coupon distribution volume
2014 Total U.S. CPG Coupon Distribution by Media
DISTRIBUTION
ANNUAL TOPLINE VIEW
CPG COUPON FACTSTM
FSI continued as the largest distribution vehicle for CPG marketers
Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity
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CPG Coupon Distribution Index by Media
Year-over-year index of coupon distribution volume
demonstrates that marketers maintained FSI while they also
increased distribution within other media in 2014
CPG Coupon Offer Characteristics
DISTRIBUTION
ANNUAL TOPLINE VIEW
CPG COUPON FACTSTM
Aside from face values and non-food duration, marketers’ tactics
remained fairly constant in 2014
Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity
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Annual U.S. CPG Coupon Redemption
Non-food CPG coupons experienced a large redemption increase
and now are nearly half of all redemptions
2014 Total U.S. CPG Coupon Redemption by Media
REDEMPTION
ANNUAL TOPLINE VIEW
CPG COUPON FACTSTM
FSI represented the largest share of redemption volume, and the
remaining half was predominantly coupons promoted with the
product package, handed-out or in a digital format
Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity
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Total U.S. CPG Coupon Redemption Volume
by Class of Trade 2014
Drug Stores and the “All Other” retailers experienced similar
increases in redemption primarily due to the increase in non-food
coupon redemption
Top 10 Retailers in CPG Coupon Redemption
REDEMPTION
ANNUAL TOPLINE VIEW
CPG COUPON FACTSTM
The top 10 retailer redeemers based on annual coupon redemption
volume all remained on the list, although rank changed slightly for
four of them
Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity
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NCH Coupon Facts™
Methodology and Source Description
About the Publisher
NCH Marketing Services, Inc., a Valassis Company, is a global leader in business solutions for the redemption,
audit, settlement and analysis of promotion offers. Each year, NCH protects the financial integrity of nearly $4 billion in promotional funds transfers between trading partners across the globe. Annually, NCH
publishes this report about U.S. coupon trends to provide a market-level understanding of the activities
driving total coupon volume and the importance of safeguarding the coupon funds that are motivating the
sale of branded consumer products for retailers and manufacturers.
About Our Methodology
With the volume of coupons processed by the company in the United States and worldwide, NCH is in a
unique position to deliver accurate reporting and impartial analysis of coupon promotional trends with a
comprehensive view of retailer redemption activity for over 60 percent of all coupons redeemed, including activity for 7 out of the top 10. This coverage, combined with our strategic partnerships, robust databases and inhouse expertise honed by nearly 60 years of coupon settlement experience, strengthens our ability to provide
industry analysis of coupon trends.
Coupons distributed and redeemed in the U.S. consumer packaged goods (CPG) marketplace are studied
utilizing data from our market-share leading manufacturer and retailer businesses, supplemented by other
independent sources. Our proprietary methodology utilizes rigorous controls and statistical standards to
maintain the integrity of the information contained in this report, as well as all other information tools supplied
by NCH.
Data points from client and market sources are dynamic. As such, projections are based on the most current
information available at the time of publication and may be revised in the future. Also, due to rounding, the sum
of certain percentages may not equal 100 percent. The scope of this report includes manufacturer coupons of
paper and paperless media formats that are most typically funded by CPG marketing budget allocations for
consumer promotion. Retailer In-Ad coupons are not included in this report, as they are most often funded by
trade dollars. Consequently, In-Ad distribution and redemption are less precisely tracked by manufacturers.
How to Use this Report
When reviewing market-level data, it is important to remember that companies or brands may experience
results that materially differ from the averages. Competitive marketplace conditions, consumer behaviors and
retail merchandising strategies are all contributing factors to the results companies or brands may experience
with coupon promotions. As such, redemption should not be the only measurement of promotional success.
Acknowledgments
A special thanks to Marx, a Kantar Media solution, whose data is included in the analysis conducted to
produce this report. Marx is the leading provider of syndicated coupon distribution information to
manufacturers of consumer packaged goods. Marx delivers brand- and category-specific promotion
intelligence for both advertisers and coupon industry vendors.
Contact Information
For more information about NCH, visit www.nchmarketing.com and follow us on Twitter @NCHMarketing.
To obtain additional information about this report, please contact NCH Analytical Services at 847.317.5500 or
via e-mail at [email protected]. For press inquiries, or permission to cite, please
contact Mary Broaddus, Valassis Corporate Communications, at 734.591.7375 or [email protected].
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© 2015 NCH Marketing Services, Inc. All rights reserved.
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