Thursday, September 10, 2009

'Coupon Enthusiasts' Drive Up Redemption Rates

Sept 4, 2009

Coupon enthusiasts are the driving force behind exploding redemption rates, according to new findings from Homescan, a service of the Nielsen Company.

Eighty-one percent of the units purchased using manufacturer coupons came from just 19 percent of U.S. households during the twenty-six week period ended June 27, 2009.

The most avid users, called “coupon enthusiasts,” are households that purchased 104 or more items using manufacturers’ coupons. The 10 percent of shoppers that fall into this category accounted for 62 percent of manufacturers’ coupon units. They also accounted for 16 percent of total unit sales making them a very attractive and important consumer target.

Still, the recession is driving heavier coupon usage among all types of consumers as many lighter users have become heavier users. After three quarters of declines in 2008, coupon redemptions spiked 10 percent in Q4 2008, per Inmar. This was followed by a 17 percent increase in Q1 2009 and a 33 percent surge in Q2. This tally includes FSI’s, on-pack offers and Internet coupons but excludes retailer coupons.

Inmar also reported that more and more consumers are using coupons for both food and non-food items. In Q4 2008 non-food redemptions were -3 percent. However, in the second quarter of this year redemptions for non-food items were up 46 percent. Food coupon redemptions were +21 percent in Q4 2008 and increased 27 percent in the second quarter of 2009.

“Without question, coupon usage is undergoing a renaissance,” said Nielsen’s Todd Hale, senior vice president, consumer and shopping insights. “More consumers are looking for value and lower prices as retailers and manufacturers are distributing more coupons and making it easier for consumers to leverage technology to access coupons they want with less effort.” Overall, 1.6 billion coupons were redeemed in the first half of 2009.

“These findings from Nielsen suggest that the increased coupon usage we’ve seen this year not only helped consumers stretch their budgets but also provided meaningful sales impact to manufacturers and retailers,” said Inmar’s Matthew Tilley, director of marketing. “Coupons have always been an effective way to encourage trial and repeat purchase and are proving to be a bright spot in an otherwise dreary economic environment.” 

Finally, the old couponing is regaining back its popularity. When the going gets tough, consumers will grab any chance to save including if they need to put efforts to do so like collecting coupons. On the other side, producers also like coupons to drive the trial of their products as well as to lock the next purchase potential by giving away generously. One thing often forgotten is tracking the impact of each coupon initiative to learn how to make it more effective next time.