2013

Annual

NCH
Coupon Facts

CPG COUPONS:
U.S. MARKET ANALYSIS

COUPON MARKET OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
About The Publisher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

HOW TO USE THIS REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Coupon Facts Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Additional Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

COUPON TRENDS ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

WHY 2012 RESULTS WERE SO DIFFERENT . . . . . . . . . . . . . . . . . . . . . . 9
WHILE TYPICAL, YOUR RESULTS MAY VARY . . . . . . . . . . . . . . . . . . . . . .13
MARKETER CHOICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
COUPON MEDIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
OFFER TACTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
REDEMPTION COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
RETAILER REDEMPTION FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Coupons Activate Consumer Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
NCH Coupon FactsTM Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

2013 NCH Marketing Services, Inc. All rights reserved.

COUPON MARKET
OVERVIEW

EXECUTIVE SUMMARY

In NCHs 48th annual review of U.S. coupon

distribution and redemption trends, we find that
Consumer Packaged Goods (CPG) manufacturers
distributed 305 billion coupons in 2012, the same
quantity as the year prior. In addition, consumers
expectations for value in their purchasing decisions
remained strong throughout 2012.

The analysis portion of the Coupon Facts report,

contained herein, provides the perspective to
understand what drives industry trends, while
hopefully also inspiring consideration of your own
strategies and tactics to compete for consumer
purchase decisions with coupons going forward.

What did change in 2012 were marketers objectives

and strategies, which resulted in a very different mix of
coupons being made available to consumers. Of course,
consumers responded differently, in the natural order of
cause and effect. As a result, total redemption for 2012
fell 17% to 2.9 billion coupons, saving CPG companies
a substantial $800 million in face value discounts.

NCH Marketing Services, Inc., a Valassis Company

(NYSE: VCI), is a global leader in business solutions for
the redemption, 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.

ABOUT THE PUBLISHER

With the volume of coupons processed by NCH in the

United States and worldwide, the company is in a
unique position to deliver the most accurate reporting
and impartial analysis of coupon promotional trends.
Please see the methodology section for more information.

The effects of such marketer-driven change impact not

only consumers, but also retailers and many others
involved in the coupon industry. For example, the
volume decline impacts per-coupon-redeemed based
measurements, including fixed cost allocations for
handling, auditing and settlement services.
The NCH Coupon Facts report provides a complete
market picture, such as the total dollar value that needs
to be protected as it transacts between trading partners,
and it allows all parties to compare their own coupon
results to the industry averages.

HOW TO USE
THIS REPORT

COUPON FACTS RESOURCES

review competitive marketplace conditions, consumer

behaviors and promotional strategies all of which are
contributing factors to the results that your company or
brand may experience with coupon promotions.

The NCH Coupon Facts report provides three primary

assets for your use:
Our U.S. Market Analysis (in PDF format) is
designed to help you make sense of the driving
factors that shaped the past years coupon trends.

ADDITIONAL RESOURCES

In addition to our Coupon Facts reporting, NCH

publishes a variety of resources to help companies
better understand their strategies and tactics within
the context of the coupon market.

Comprehensive online reference charts feature

easy-to-use navigation, designed to help you
quickly find the information thats most relevant
to you, and are cataloged for distribution facts,
redemption facts and product sector facts.

For example, NCH publishes a variety of Category Fast

Facts, which are available exclusively to NCH clients. As
the name suggests, Category Fast Facts are designed to
provide distribution and redemption insights specifically
for the categories in which NCH clients compete.

Comprehensive PowerPoint charts provide a

convenient way for you to incorporate NCHs
data into your own presentations. We simply ask
that you cite NCH as the source of any data you
might use from this report.

Throughout the year, NCH also publishes a variety of

articles and reference materials drawn from our annual
Consumer Survey and our best practices perspective
on the controls necessary to protect, audit and settle
coupon transactions.

To utilize the online charts and PowerPoint, or to

download your own copy of this analysis, visit
www.nchresourcecenter.com. Free registration
provides immediate access to the Coupon Facts
and Insights section.

For more information about NCH, visit

www.nchmarketing.com. To obtain additional
information about our annual Coupon Facts report or
other resources available from NCH, please contact
NCH Analytical Services at 847.317.5500 or via email
at NCHAnalyticalServices@NCHMarketing.com.

When reviewing market-level data, it is important to

remember that your company or brand may experience
results that materially differ from the averages.
Syndicated data suppliers, strategic media partners and
promotional agencies are best positioned to help you

Visit www.nchresourcecenter.com for more Coupon Facts information

4

COUPON TRENDS
ANALYSIS

Consumer Packaged Goods (CPG) marketers

maintained a steady flow of coupons to
consumers in 2012. But, the volume of
response was different. Merely looking at the
2012 U.S. CPG coupon market topline industry
trend numbers in comparison to 2011 isnt a
good indication of consumer demand or
marketer utilization. Without the full story about
conditions and objectives, one could easily
misunderstand what was driving the results
based on percent change statistics alone.

CPG Marketers Maintained a Steady

Flow of Coupons to Consumers in 2012
Total U.S. CPG Coupon Distribution Volume, In Billions/All Media

2012 coupon distribution is a good example:

305 billion coupons were distributed by CPG
marketers in 2012, exactly the same number as
2011. On the surface, that might appear as if
there was no change at all.

Nothing Changed?
Time To Look Closer:
Who
What
Where
When
How

Digging deeper reveals that the 305

billion coupons distributed in 2012
were not the same 305 billion coupons
from 2011. Who was promoting, what
was being promoted, where it was
promoted and how those coupons were
used by marketers in 2012 all differed
substantially from the recent past.

Total U.S. CPG Coupon Distribution

Volume, in Billions/All Media

For example, of the 305 billion coupons

issued by CPG marketers in 2012,
non-food categories comprised 4.4%
more of the available coupons than
the prior year, with items such as
medications, personal care and other
household products all distributing a
greater quantity. CPG marketers
increased the coupons available
in non-food categories where
consumers tend to delay purchases or
have a multitude of national brand and
retailer private label choices. Conversely,
there were 6.5% fewer food coupons,
affecting product segments that
consumers purchased more frequently.

During the Great Recession marketers broke records for

the largest ever annual number of coupons distributed,
then cut back 2011 coupon distribution by eight percent.

2012 Percent Change in U.S. CPG Coupon

Distribution Volume
by Product Sector/All Media

Many of the brands, companies and categories that promoted

in 2012 were very different than those of the prior year as CPG
marketers strategies shifted.

When the Who

changes, What
level of
response to
expect should
change too

THE
WHO

Total U.S. CPG Coupon Redemption Volume,

in Billions/All Media

As CPG marketers shifted their coupon strategies

in 2012 to meet a variety of marketing objectives,
the redemption results for 2012 were naturally very
different from 2011.

Virtually No Change in Consumer Reported

Engagement With CPG Coupons
Percent of All Consumers

NCH Consumer Survey data is collected in the context of CPG

manufacturer coupons and CPG retailers. For example:
When shopping for items such as food, over-the-counter
medications, paper products and health & beauty care at
stores such as grocery, mass merchandisers, supercenters,
drug or dollar stores, how often do you use coupons?

Year-over-year comparisons can

provide inconsistent measures of
any trend, and in the case of 2012
redemption volume, the result is
measured against a prior year when
the conditions and marketer activities
were very different. In 2011, total
market redemption was growing as
food products maintained a steady
pace of coupon distribution for
established brands, and considerably
fewer new products were introduced
with coupon events. The second half
of 2011 experienced some CPG
marketing budget cutbacks, setting
the stage for redemption decline
carryover into 2012. Other market
conditions differed as well.
Consumers remained actively engaged
in seeking coupons, planning shopping
lists with coupons and making brand
purchase decisions based upon the
coupons available to them in 2012.

Small rates of year-over-year change have

been seen historically in various metrics
across the U.S coupon marketplace. The
rate of redemption volume decline in 2012
is comparatively very different, however,
from what NCH had ever experienced in
the past. And, we began serving
retailers and manufacturers for their
coupon redemption, audit and settlement
needs more than 55 years ago. NCHs
experience, focus and robust data enabled
us to analyze and evaluate the causal
effects in an impartial manner.

Total U.S. CPG Coupon Redemption

Volume, in Billions/All Media

On the surface, one might see such a

change in redemption and guess the
reason could be a sudden macro-economic
improvement that dramatically reduced
consumers desire to save money. (But,
weve found that isnt the case, as most
everyone still loves to get a deal.) Or,
perhaps, one might see a large decline
and theorize that a rapid adoption of some
new technology rendered consumers blind
and oblivious to all the other coupons
available to them. (Instead, weve found
that the true tipping point with 2012 critical
mass is just simply a shift in what products
were promoted.)

Why CPG Marketers Cut

Coupon Redemption Costs
in 2012
2012 Olympics Sponsorship Costs
Higher Advertising Costs During
Presidential Campaign Year
Drought and Other Commodity
Cost Increases

One could rely on the trends in typical

offer characteristics, like face values or
expiration dates, and assume they added
up to an unprecedented year-over-year
redemption decline. (But, in aggregate, the
tactical changes were not vastly different in
2012 when compared to long-term
marketer trends to control redemption
liabilities by limiting the attractiveness
of coupons.)
There are many other
guesses and theories one
could make with such a
large and dynamically
changing U.S. coupon
promotion market.

Stretching Fixed Marketing Budgets To

Cover New Media Experimentation
Overall Slow Sales Growth During
Weak Economic Recovery

Few things have the

weight and power
to change a
market trend so quickly.
This report provides
that answer.

As confusing as it all might

appear on the surface,
the primary drivers of
redemption volume change
in 2012 are really very simple and clear.
Weve already given you the clues. Read
on to find the full answers.

WHY 2012 RESULTS

WERE SO DIFFERENT

The redemption decline was not directly

attributable to a consumer attitude or
opinion change. And, there was no
fundamental change in 2012 that reduced
the core audience for CPG marketers
coupons. In fact, consumers expectations
for value in their purchasing decisions
remained heightened and strong throughout
2012. NCHs August 2012 Consumer
Survey found that 79.8% of consumers
regularly shop using CPG coupons, very
similar to the 80.6% prior year result, and
well above the 63.6% who reported
regularly using coupons in the
pre-recession 2007 survey.

26.4% of con
sumers used
coupons in 2
more
012 than the
y did in 2011
saying they li
,
ke to save m
oney and ne
stretch their
ed to
budgets as th
e main reaso
ns.
Source: NC
H Consumer

Survey

Consumers Regular Use of Coupons For

CPG Products
Percent of All Consumers

Consumer
demand for
value and
saving
remains
strong.

Official period of most recent recession according to

the Bureau of Economic Research Business Cycle Dating
Committee: December 2007 to June 2009. NCH
Consumer Surveys are conducted annually in August.

Percent of Consumers Who Say They Focus

Mainly on Needs vs. Wants When Shopping
Percent of Consumers Who Say They Focus Mainly on
Needs vs. Wants When Shopping

The BIGinsight Monthly Consumer

Survey in December 2012 found
that 53.7% of consumers continued to
focus more on needs than wants while
shopping. That result is very similar to
the 52.1% in December 2011 and the
52.7% in December 2010 who also
said they focus more on needs than
wants.
Only 4.4% of consumers in NCHs
2012 survey said they were buying
what they want, when they want and
were less concerned about trying to
save money.

BIGinsight.com is a consumer-centric information

portal providing the latest insights using fresh data from
multiple sources representing the voice of the consumer
and provides knowledge to marketers regarding
consumer views on the economy, personal finance,
retail, lifestyle, media and domestic and world issues.
Visit www.biginsight.com to learn more.

BIGinsight, NCH and other surveys

confirm that a strong value-oriented
mindset has persisted for a large
segment of the population despite
some improvements in 2012 overall
economic metrics in the U.S., such
as consumer confidence and
unemployment rates.

U.S. Unemployment

Dec 2012: 7.8%

.7 Share
Dec 2011: 8.5%
Improvement
Compare to Dec. 2007: 5.0%
Source: U.S. Bureau of Labor Statistics

Consumer Sentiment Index

Dec 2012: 72.9

3 Point
Dec 2011: 69.9
Improvement
Compare to Dec. 2007: 74.5
Source: University of Michigan

10

Percentage Change in FSI Event Dates for

New Product Introductions
Source: Marx Kantar Media Solution

Marx, a Kantar Media solution, 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. Visit
www.kantarmediana.com/marx to learn more.

What did change in 2012

was the strategy of many marketers
to shift their budget spending to
coupon promotions for different
products and brands than they had
been promoting with coupons during
the preceding years.
Specifically, the year-over-year
change that had market scale in
2012 was a strategy shift among
CPG marketers to promote core food
brands less and promote non-food
items even more, while also
substantially increasing the
introduction of new products to the
market with FSI coupons. These
changes affected the mix of coupons
available to consumers in the
marketplace.
Coupons have been effectively used
to generate trial of new products for
125 years. Such a significant
year-over-year increase in 2012,
however, had a direct impact on the
annual coupon industry measures
because even successful niche
products, line extensions and
start-up brands wont typically
deliver the same large-scale
redemption volume as coupons
offered on well-established and
high-market-share brands, simply
because the target audience is smaller.

The first coupon ever

distributed in the U.S.
was for a new
product trial of
Coca-Cola in 1887.

11

NEW
PRODUCTS

Total U.S. CPG Coupon Distribution Volume

by Segment, in Billions/All Media

The five year view shows where

food products corrected 2012
coupon distribution volume, yet
non-food continued a
long-term growth trend.

Percent of Consumers Using Less Coupons,

Top 5 Reasons

After a period of heavier promotion

for established brands, CPG
marketers made what could be
characterized as a market correction,
particularly among food products,
reducing their support of core sales
generated with coupons. Instead,
food products diverted their
promotion spending into new product
introductions with coupons, as the
market segment where more of the
new product coupon events occurred
in 2012.
Non-food items continued a
long-term trend of promoting both
new products and established brands
with an increasing volume of coupons
available to consumers. The effect,
however, was lower redemption
volume for the total market, as
non-food items tend to be purchased
less frequently and therefore redeem,
on average, lower than food items.
Naturally, consumers responded
differently to the different mix of
coupons available in the marketplace
in 2012 than those issued the year
prior. Among those in NCHs
Consumer Survey who said they were
using fewer coupons than the year
before, 46% of the consumers cited
the number one reason was: I cant
find coupons for the products I want
to buy.
The consumer experience was directly
the result of CPG marketers shifting
more of the coupons they issued
in 2012 to non-food products and
brands that were new to the market.

#1 reason consumers
cited for using
fewer coupons:
I cant find coupons
for the products I
want to buy.
12

WHILE TYPICAL, YOUR

RESULTS MAY VARY

Every company and brand follows their own strategy,

and as such, your perspective might be different than
others. Depending on objectives, the results achieved
might be as expected and planned. Or, maybe a
competitive move generated a different result for some
brands coupons in the marketplace, so the results might
have been a surprise. Certain companies were impacted
by raw material costs, and marketing budgets were
reduced to keep selling costs flat, or conversely, retail
price increases affected the attractiveness of other
coupons in the marketplace (positively or negatively).
These, and many other experiences, are just examples
of the variability that has occurred across the
marketplace in the past year.

The media landscape, offer restrictions, word of mouth

and maybe even an abundance of retail-level deals,
which could be combined with coupons to induce pantry
loading, could have their own effects on individual
brand coupon results in the years analyzed.
While there were numerous changes and many
contributing factors to market trends in 2012, much
like any other year, it is possible to isolate the effect
that marketers choices had on the whole. The evidence
is simple and clear that the mix of coupons made
available had the largest single effect on redemption
volume results for the total coupon market in 2012.

Redemption volume declined in 2012

due largely to a dramatic shift
in the mix of coupons
available to consumers:
fewer food coupons
and more new
product coupons
were issued

The good news is hindsight is 20/20. As such, each

company should evaluate their own coupon results as
part of a bigger picture of the conditions specific for
each brand.
Certainly, the trends in the coupon marketplace
cannot be analyzed in isolation. Factors such as
channel shopping shifts, trade support and trip
frequencies can affect where consumers use
coupons all dependent on product availability at
the retail location, and of course, when a consumer is
ready to make a planned purchase with a coupon.

13

In addition to the brand or product to be

promoted, marketers made other choices for
each coupon offer that they issued in 2012.

MARKETER
CHOICES

For example, the choice to deliver coupons to consumers

in one media format over another will affect redemption
rates for an offer, depending on the media audience,
reach and scale. As well, other tactical choices, such as
the discount amount, purchase requirements and offer
duration, will affect the results all of which are in the
marketers control.
While tactical offer choices did change overall in 2012,
the changes were typical of long-term trends in the U.S.
coupon market that have contributed to expected and
small declines in year-over-year redemption volumes.

NCH has studied the hundreds of thousands of coupon

offers on our database and found that the 2012 redemption
results were 71.8% directly attributed to choices in marketers control,
and 28.2% were attributed to external factors. The significance of this finding
is that the amount of marketer control didnt change in 2012 vs. 2011. Therefore,
improvements in macro-economic factors didnt materially affect the redemption volume market as a whole.
Certainly, each brands position in the market and their own experience is unique, so while overall market results
are explainable in broad terms, individual companies must also consider their own actions, the actions of their
competitors and retailer trading partners, as well as numerous other factors that can affect redemption for a
specific brand or offer.

Analysis of Tactical Choices and Market

Factors Influence on Final Redemption Rates
(Multi-Regression Analysis of R2 Explanatory Controlled Share of Final Redemption)

Controllable Factors:
Brand
Circulation Size
Duration
Face Value
Media
Purchase Quantity
Season

External Factors:

Certainly, each brands position in the market and their own

experience is unique, so while overall market results are
explainable in broad terms, individual companies must also
consider their own actions, the actions of their competitors
and retailer trading partners, as well as numerous other factors
which can affect redemption for a specific brand or offer.

14

Competition
Economy
Private Label
Share / ACV
Shelf Stock
Trade Support
Weather
And More...

Coupons are the #1 most

influential form of
marketing to consumers
for grocery vertical
purchase decisions.

COUPON
MEDIA

Coupons on the whole are the most influential medium of any

kind to motivate consumer packaged good purchases. Over 70%
of consumers rated coupons #1, well ahead of advertising, social
media and even in-store promotions, as the most influential form of
marketing for the grocery vertical in the BIGinsight Media Behaviors
and Influence Survey, December 2012.
CPG marketers used the FSI to distribute the largest volume of all
their coupons in 2012, increasing the mediums share to 90.1% of the
305 billion coupons issued. The 0.7 FSI share-point increase came
from In-Store, Direct Mail and Magazine as CPG marketers reduced
their use of those higher-redeeming media while also continuing to
experiment with the audience reach and scale potential of various
digital media. In total, digital remains less than 1% of all coupons
distributed, including those printed at home and paperless offers
downloaded to loyalty cards or mobile devices.

Percent of Total U.S. CPG Coupon

Distribution Volume by Media Type

It is commonly known that newspapers

have experienced declines in
circulation as readers consume more
of their news and entertainment in
digital formats ranging from online
to mobile devices and apps, although
the rate of change does differ
demographically. A misperception,
however, is that this digital migration
has adversely affected the total reach
of FSI coupons. That is not the case,
as the FSI vendors have maintained
circulation through a variety of
expanded distribution techniques,
including added papers, market
changes and delivery in the mail
along with retailers advertising flyers.

The fact is, most major CPG companies

utilize the FSI extensively for a variety
of well-established reasons. Yet, the full
national FSI distribution list potential is
infrequently utilized for a coupon event.
Some marketers are integrating print,
digital and in-store coupons to
broaden their consumer reach as may
be appropriate for a brands individual
target audience and promotional
budget. These strategies, combined
with the enablement of new coupon
media formats, have grown the total
consumer audience potential of CPG
coupons. Yet, the opportunity exists for
even greater utilization of data, better
integrated media planning and more
strategic coupon campaigns to achieve
improved future results.
FSI stands for Free Standing Insert. FSI is
a four-color multi-page printed advertising
booklet with CPG coupon offers delivered
with newspapers (often in Sunday editions)
and those same booklets delivered in direct
mail packages along with local retailer
advertisements. FSI can be cooperative
booklets such as RedPlum or SmartSource
and solo corporate booklets.

15

2012 Percent of Total U.S. CPG Coupon

Redemption Volume by Media Type

The scope of redemption volume by media is a

function of each mediums scale of consumer reach,
the level of engagement consumers have with the
medium and the attractiveness of the product offers
issued by marketers through that distribution medium.

Paperless coupon formats have grown as some

CPG marketers have been experimenting with offers
to target and expand audience reach. Those
opportunities are promising; yet, paperless coupon
formats are currently dependent upon unique point
of sale (POS) system enablement, and they require a
change in consumer planning or shopping behavior
to engage the consumer compared to other forms of
coupon media. The amount of consumer engagement
in all forms of digital coupon media can have a
positive influence on the propensity to redeem, yet can
also limit the total scale of response, impacting return
on investment analysis for CPG marketers.

Among digital coupon media, print-at-home

coupons are fairly common today, available on
media supplier websites, affiliate partner websites
or the websites of retailers who elect to participate.
Print-at-home coupons are now nearly 6% of
all coupons redeemed in the U.S.
Beyond print-at-home, paperless coupons are
being made available via retailer websites or
mobile applications to download offers. In some
cases, these offers are targeted to consumers based
on their shopping behaviors and opt-in interests.
All paperless vehicles combined, including mobile,
have grown to represent a little more than 1% of
all coupons redeemed.

C2C is an abbreviation for paperless coupons

downloaded to retailer loyalty cards or other unique
identification numbers presented at the point of sale.
Redemption volume reached market projectable scale
for the first time in NCHs 2012 analysis.
Internet coupons are offered digitally, yet printed on
paper to redeem. For the purposes of measuring the
redemption market and offer liability, NCH tracks
Internet coupons based upon the quantity printed
and the quantity redeemed.

While redemption metrics are often reported, the value of any

coupon media is broader when brand awareness, consumer targeting,
retailer tie-in and ROI are considered as well.
Redemption rates by media for each market segment and product sector are available by visiting NCHs complete online
Coupon Facts reference charts: www.nchresourcecenter.com
16

OFFER
TACTICS

Driven mainly by non-food

products, marketers have
continued to
control liability with
shorter durations.

Total U.S. CPG Coupon Distribution

Volume/All Media
The measurement of three characteristics
provide a quick view of the attractiveness
of any coupon offer to consumers;
therefore, the trend in market averages
of those tactics demonstrate how CPG
marketers control their expected
redemption liability for coupons.

Average Duration in Weeks For Total U.S.

Coupon Distribution Volume/All Media

Overall market trends for many years

have indicated that marketers are
suppressing the attractiveness of offers,
and, overall, nothing particularly changed
with respect to that trend in 2012. As with
all coupon trends, however, individual
companies, brands and categories may
have experiences that differ from the
market averages.
The non-foods products segment as a
whole further shortened the duration of
offers in 2012; therefore, while more
coupons were distributed by that area, the
fuse length kept redemption volume and
cost from rising.

For specific offer tactics in each market segment and product sector see NCHs complete online
Coupon Facts reference charts at www.nchresourcecenter.com
17

REDEMPTION
COSTS

One outcome of a reduction to 2.9 billion coupons redeemed

in 2012 was that it saved marketers a substantial $800
million in face value discounts compared to the prior year.
That was the intended result of many of the marketer actions
mentioned in this report. Again, each marketers experience
may be different, based on their own strategy. And, there
certainly are companies and brands who continued to drive
increased sales activity with coupons in 2012, and their
redemption volumes and costs are trending opposite of the
market average.
The unfortunate reality for a marketplace that derives
handling, auditing and settlement efficiencies and investment
coverage from volume, however, is that the decline means
required fixed cost items and capital expenditures must be
spread across a smaller base. Therefore, those who budget
for or apply charges on a per-unit basis have experienced
cost-per-coupon-redeemed rate increases, even as the
total actual dollars declined. If you have not adjusted your
per-coupon budgeting accordingly, you should, so as not to
be surprised in the future.

Total U.S. CPG Redeemed Coupon Savings in

Billions of Dollars/All Media

THE
MONEY

Redemption cost
was $800 million
less in 2012.

18

Coupon users
save $11.20 on
average per shopping
trip with coupons
(11.5% of the
basket total), with 15
minutes of seeking,
clipping and
planning their
shopping
with coupons.

RETAILER
REDEMPTION FACTS

Traditional supermarkets continue to see the majority of

all CPG coupon redemption volume; however, other retail
channels are seeing a long-term growth trend in their share
of redemption volume as the channels blur and consumers
shop for packaged goods and food items across the retail
outlet types.
Price and promotion continued to remain highly
important to consumers in 2012, and that shaped their
shopping behaviors. 97.2% of consumers in NCHs 2012
Consumer Survey reported comparing prices between
brands, and 84.1% said they switched stores to take
advantage of weekly specials.

Percent of Total U.S. CPG Coupon

Redemption Volume Redeemed by
Class of Trade/All Media

74.2% of consumers
regularly use coupons
to plan their shopping
list. (19.7 Always,
24.2% Often and
30.3% Sometimes)
NCH 2012 Consumer Survey

Percent Change in Class of Trade for Total

U.S. CPG Coupon Redemption Volume,
2011 vs. 2012/All Media

The market redemption

volume decline
was experienced
across all retailer
formats
in 2012.

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CONCLUSION

Based on what NCH has seen during some recent

unusual times, CPG marketers have been working to
find and maintain the right balance in their coupon
marketing to support new product introductions while
also continuing to meet consumers expectations for
value in all their purchase decisions. The confusing
macro-economic environment and emerging capabilities
of new coupon media formats makes it all the more
challenging. Especially if the CPG marketing budget
isnt growing to accommodate the increasing demands.

What the future will hold for the U.S. CPG coupon
market will be determined by how marketing budgets
are allocated in 2013 to maintain and grow sales with
coupons. Of course, retailers and brands will need to
continue generating consumer awareness, effectively
merchandise and motivate shopper behaviors. Who
does what, where, when and how is certain to influence
the total coupon market trend. NCH will remain focused
on helping trading partners achieve their objectives
by protecting coupon dollars from potential risks or
waste as the leading agent of choice for coupon
audit, settlement and destruction services in the U.S. and
globally.

NCH encourages all retailers and manufacturers

to work collaboratively to find ways to make their
marketing budgets elastic as competitive investments
in reaching, influencing and activating consumers with
coupons are expected to grow. Alternative channels are
providing consumers with many choices in how they eat,
care for their families and maintain their homes. Yet, the
fundamental consumer need to shop smartly and stretch
limited funds will not change.

Only 5.4% of consumers who

adopted new saving techniques
say they would not continue any
of those shopping behaviors
when their personal economic
confidence improves.

The good news is coupons have always been

and will continue to be a powerful consumer
motivation tool for generating trial, product
selection, repeat purchase and brand loyalty
without broadly rewarding purchases that would have
otherwise occurred.

NCH 2012 Consumer Survey

COUPONS ACTIVATE CONSUMER PURCHASES

Behavior
Coupons influence trial of new product
Coupons influence selections of a brand typically
not purchased
Coupons influence selection within accepted set
of established brands
Product is purchased only with coupon
(Percent of all consumers, NCH 2012 Consumer Survey)

Sometimes
42.9%
44.8%

Very Often
17.5%
12.8%

Always
10.4%
5.8%

42.4%

25.1%

7.8%

36.9%

10.9%

3.4%

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METHODOLOGY

NCH COUPON FACTS METHODOLOGY

This report also contains various references to NCHs

most recent Consumer Survey. The data was obtained
in August 2012 using a market research firm with
proficiency in internet surveys. The sample was derived
from an online consumer opinion panel, and all
participants were at least 18 years of age and living
in the contiguous United States. Consumers were
emailed an invitation to participate in the survey and
were given three days to complete it. The survey was
closed once 1,000 completed responses had been
reached. The responses were weighted by factors
obtained from national census data to provide
appropriate representations of demographic groups
at summary levels.

With the volume of coupons processed by NCH in

the United States and worldwide, the company is in a
unique position to deliver the most accurate analysis of
coupon promotional trends. Coupons distributed and
redeemed in the U.S. Consumer Packaged Goods (CPG)
marketplace are studied utilizing our manufacturer client
databases, data cleared via our retailer processing
operation and 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 all 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. C2C is an abbreviation for
paperless coupons downloaded to retailer loyalty cards
or unique identification numbers, currently deployed
primarily in the grocery retail channel.

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.
Marx, a Kantar Media Solution
952.925.5272
www.kantarmediana.com/marx

Complete reference charts are available online and in

PowerPoint by visiting www.nchresourcecenter.com
2013 NCH Marketing Services, Inc. All rights reserved.

21

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Tel 847.3175500 Fax 847.317.0083
www.nchmarketing.com

2013 NCH Marketing Services, Inc. All rights reserved.

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