Redemption for All

Posted on by Chief Marketer Staff

The decline in consumer coupon use that has plagued packaged goods marketers for several years may finally be leveling off, according to a new survey by Lincolnshire, IL-based NCH NuWorld Marketing.

A total of 249 billion coupons were circulated in 1998, with “strong upswings” in use near the end of the year suggesting that the erosion has abated, the survey says.

At 4.8 billion coupons, total redemption volume dropped 2 percent in ’98, the lowest decline in the past five years. “Indeed, the coupon industry has something to smile about,” NCH Nuworld vp Charles Brown says. “Almost all coupon media saw increases in 1998, as most marketers sought the brand-building sales increases and targeting benefits that come with sustained levels of coupon promotion,” he says, adding that coupons provided a total of $3.6 billion in savings to consumers.

In particular, free-standing inserts in Sunday newspapers, the largest coupon vehicle, increased their share of the market and helped to boost year-end totals, the survey found.

The downside was that marketers kept redemption attractiveness “at compressed levels,” Brown says. Although the average face value of coupons increased slightly to 70.2 cents (from 67.9 cents in 1997), more coupons required consumers to purchase two or more products to receive the discounts – a requirement widely disliked by customers, he says.

Nearly 22 percent of all coupons circulated are of the multiple-purchase variety, according to Brown. The trend is driven by grocery product manufacturers, who distributed more than 25 percent of their coupons as multiple-purchase last year, up one-and-a-half percentage points. Health and beauty care product manufacturers maintained multiple purchase coupon levels at 9.5 percent last year.

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