Digital CPG Blog

CPG marketers distributed 305 billion coupons in 2011, an 8.1% decrease from 2010, according to a new report from NCH Marketing Services, a Valassis company.

The Annual Topline U.S. Consumer Packaged Goods Coupon Facts Report noted that the decline in 2011 reflects the fact that 2010 was a record-setting year for coupon distribution, which increased markedly during the recession.

NCH Marketing Services said in the annual report on coupon distribution and use that shoppers saved $4.6 billion last year by using coupons, 12.2% more than in 2010. Regular coupon use was 17 share points higher than before the recession, at 80.6%, even as distribution fell 8.1% compared with 2010, to 305 billion coupons.

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Market research firm Kline reports adoption of social media marketing by beauty companies is growing, and makers of cosmetics and toiletries grew their viral campaign efforts this past holiday season. Driving the growth in their use of social media is the realization that consumers aren’t always reachable via traditional (and more expensive) channels, like television.

But that doesn’t mean that beauty marketers are moving away from traditional channels. Couponing promotions, for instance, have been popular of late due to a competitive pricing environment. Beyond that, Kline Senior Associate notes, “there is no cookie-cutter approach…and brands are experimenting with what approaches work best with their business model, their consumer base, and the image they want to project.”

But you can definitely use traditional channels like couponing in the social media channel as well. Indeed brands that do both will probably excel in their conversions.

People who use coupons aren’t just deal-chasers, they’re your best customers:

According to a new survey of consumers conducted by Forrester Consulting (commissioned by online coupon company WhaleShark Media), active coupon users reported spending more than $800 per year with e-commerce sellers than the less active coupon users ($1,805 vs. $1,025). Moreover, nearly three-quarters of active coupon users said they would be more likely to try a new brand if they had a coupon or promotion code, compared with 54% of less active coupon users.

“[Online coupon use] generates new users and it increases spending,” Cotter Cunningham, CEO of WhaleShark, tells Marketing Daily . “I had this image in my head of the coupon user who buys the most expensive thing they can [with the coupon] … but it clearly isn’t the case.”

In addition, 88% of the respondents said the promo codes and coupons were the deciding factor when it came to making a purchase. The codes and coupon also reduce shopping cart abandonment, with 60% of respondents saying they would be more likely to reconsider buying a product they had placed in an online shopping cart, but had not bought if they received an online coupon or promotion code for that product.

“Consumers seem to be more loyal and have more positive feeling to merchants who [offer] coupons,” Cunningham says. “And if I’m a merchant I would find it exciting.”

Energizer Personal Care brand Schick Intuition just launched a new, interactive coupon-oriented Facebook application (www.facebook.com/schickintuition) asking customers to tune into their intution while they tune into some of the top social media influencers: Melanie Notkin, Founder of The Savvy Auntie, Kimberley Clayton-Blaine, Executive Producer of TheGoToMom.TV and MommyToMommyTv.com and Audrey McClelland, Founder of MomGenerations.com.

“Schick Intuition is excited to escort consumers on the journey to discover the secrets to simplifying their active lifestyles,” says Chit Itchon, senior brand manager Schick Intuition. “We’re looking forward to interacting with our fans through this program, and start a dialogue around simple tips that can make a difference in their daily lives.”

Now until October 30, 2011 fans can visit www.Facebook.com/schickIntuition to take the “Intuition IQ” quiz and discover if they are “Simple Carefree,” “Simply Flexible” or “Simply Smart.” After taking the quiz, fans are able to download a $3.00 coupon for any Intuition razor or 3ct. refills.

Today, I wanted to highlight the two panels that myself and my colleague Craig are going to be participating in for the following conference. If you register, don’t forget we have a special discount for DigitalCPG.com readers!

The Smarter Shopper: Marketing to the Digital Consumer
Tue – Wed, September 20-21, 2011
Stamford, CT
Register now >
Use the code “digitalcpg”  at registration for a 10% discount just for DigitalCPG.com readers!

Client-side marketers discuss the challenges and opportunities associated with engaging shoppers effectively at the intersection of digital & shopper marketing. Learn how they’re getting the most out of their agencies, their retail partners and themselves.

CVS.com and Alice.com: The E-Tailers Speak
Speakers Craig Andler Dustin Humphreys Michael Lewis

What manufacturers can learn from eTailers about staying relevant to smarter, digitally-empowered shoppers

Speaker Info

Dustin Humphreys, General Manager – CVS.com and Director, Digital Strategy & Operations, CVS
Craig Andler, Co-Founder & VP of Business Development, Alice.com

Digital coupon company Coupons.com recently closed on a $200 million funding round, reports GigaOm.

“Right now we have about 300 employees based in Silicon Valley,” CEO Steven Boal said. With this new funding, the company plans to add 100 new staff members in the next six months and add new sales offices in New York, Chicago and Los Angeles. Coupons.com will also focus on adding new mobile and social networking technologies, he said.

But while Boal was happy to discuss Coupons.com’s consumer traction, he was notably mum in the GigaOm interview on disclosing details about the company’s financial performance. He declined to answer questions about Coupon.com’s sales figures, its prior funding history, whether or not it’s profitable, or who exactly participated in this latest financing round.

Regardless, the news is great for all those involved in digital couponing as this space only gets larger and more profitable.

Groupon is entering the grocery market. But probably not how you think.

Groupon is partnering with a New England supermarket chain to offer deals on groceries. Here’s what will happen – Groupon subscribers will be notified of the deal at Big Y Foods stores — a $39.99 “Shellfish Grill Pack” for $24. But unlike most Groupons that rely on a printed coupon or mobile phone for redemption, those who purchase the deal will have it credited to their Big Y Foods loyalty cards.

“It’s seen as test of whether Chicago-based Groupon can adapt its daily deals to retailers beyond the small merchants that have been its core business,” reports Chicago Business. “One major challenge has been redeeming the Groupon offers. The traditional daily deals require Groupon users to print out paper coupons or use an electronic version on their mobile phones.”

Of course,  if it’s successful, other grocers are lined up to participate. Would your brand want in on such a deal?

CPG manufacturers offered consumers $485 billion in coupon savings in 2010, according to the “2010 Coupon Facts Report” from NCH Marketing Services, a Valassis company. This represents a 13.9 percent increase over the prior year and 47.4 percent growth compared to five years ago.

Here are some more points from the report.

Coupons become more DESIRABLE:

• The average face value of CPG coupons distributed in 2010 increased by 6.6 percent to $1.46.
• The average coupon face value distributed for grocery products in 2010 was $1.24, up 6.9 percent from the prior year.
• The largest growth was in beverages, now averaging $1.52 up from $1.18 in 2009.
• The average coupon face value distributed for HBC products was $1.94, up 6.6 percent from the prior year.
• Over the counter (OTC) and prescription medication coupons carry an average face value of $2.21, up from $2.17 in 2009.
• 26 percent of all CPG coupons issued in 2010 required the purchase of two or more items to obtain the offer discount. 33 percent of the grocery coupons required multiple purchases and only 13 percent of HBC coupons required multiple purchases to receive the discount.
• Consumers now have a week and a half less time to use coupons, compared to the prior year, due to an overall shortening of offer expiration dates in both the grocery and HBC segments. The average expiration is 10.1 weeks.
• 64.4 percent of all grocery coupons distributed expire in eight weeks or less, and 59.6 percent of all HBC coupons distributed expire in eight weeks or less.

Consumers ENJOY the frugal lifestyle:

• 25 percent report that they are clipping more coupons due to their personal economic situation.
• Nearly three quarters of those who made such shopping changes expect to continue their frugal habits in the future, even as the economy improves.
• Among those consumers who reported using more coupons than the prior year, the largest share in 2009, 37.4 percent, explained their reason for doing was so to stretch a limited grocery budget out of necessity.
• Once consumers adopt these frugal habits, they quickly discover that they like the feeling of saving money. Acceptance of these new habits can be seen in the largest share of response for increased coupon usage in the 2010 survey — 29.3 percent of consumers stated they are using more coupons for the enjoyment of saving, an increase of 11.7 share points over those stating that reason the prior year.

Jimmy Dean wanted to solve those traditionally tough coupon problems of distribution and targeting and turned to a shareable coupon campaign. Here’s how it worked:

Basically the coupon campaign, which ran for a month, allowed online users to print off a coupon worth $1 off a 4-count pack of D-lights. However, if they chose to share the offer with three of their friends via email, Facebook Twitter or MySpace, they could score a coupon worth $2.50 off the same merchandise.

Sounds like the Huggies campaign right? So, did it work? Oh yes -

According to metrics provided by SocialTwist, in the 30 days the Jimmy Dean D-lights coupon campaign ran, more than 64% of users who came to the microsite opted to refer the coupon to their friends and get the higher rebate. Of those referrers, more than 70% of the sharing was done via email, while 27% of users shared over Facebook, and 1% each over Twitter and MySpace.

However, when it came to which channels produced the most clickthroughs from those referred friends, Facebook won out at almost 41% of shares, compared to only about 30% for email. And although it had fewer users, Twitter proved almost as effective as email in terms of driving traffic from referred friends: 29.35 of those who saw the referring tweet from someone they followed went on the click through to the microsite.

Word of mouth works best when it comes from those you know and allowing your customers to spread what’s valuable to them to each other is always important. This type of deal is still early enough that it can still be incredibly effective, so don’t wait to get on the bandwagon!

With all our talk on digital coupons, you might think we’ve forgotten paper coupons – not so!  Paper coupons are still king –

According to NCH Marketing Services’ Coupon Facts Report, 2011, freestanding inserts in newspapers account for 87.7% of U.S. CPG coupon distribution. The rest consists of in-store handouts (5.2%), direct mail (2.4%), magazines (2.2%), in/on pack and cross-ruff, an on-pack coupon redeemable on a different product (1.1%) — and finally all other, which includes all digital formats, at less than 2%. Most industry sources peg the percentage of digital coupons at 1%.

But digital coupons are where the growth is at –

When it comes to growth, however, digital is where the action is, albeit from a small base. Aided by the tough economy and rising food prices, total CPG coupon redemption grew 3.1% last year, and distribution jumped 6.8% to 332 billion, according to NCH. But the number of coupons available at major online distribution sites increased by 33.6%, and the number of manufacturers offering them (290) grew by 17%, according to Marx, Minneapolis, a division of Kantar Media.

And if my building is any indication, despite the prevalence of freestanding coupons appearing in our mailboxes, those go straight into the recycling bin whereas the Groupon and Living Social deals get emailed and shared.