• by Jack Loechner , Staff Writer @mp_research, February 9, 2012

According to the 2012 NCH Coupon Facts for the U.S. CPG coupon industry, $470 billion of coupon value was offered by consumer package goods (CPG) marketers to U.S. consumers last year, a 26% increase over the pre-recession period of 2007. Value-conscious shoppers responded by redeeming $4.6 billion in savings, an increase of 12.2% over the year prior, and 58.6% higher than five years ago. During 2011, 3.5 billion coupons were redeemed, up 6.1% from 2010, and 34.6% since 2007.

Overall, the average face value offered remained flat at $1.54 in 2011, with Grocery cutting three cents off the average value to $1.17 and HBC offering $2.09. Despite the lower average face value being offered on Grocery coupons, consumers redeemed slightly more of the higher value coupons available. The HBC average face value redeemed was $1.83, up 6.4%.

The last three years represent the highest annual volumes of coupons distributed since the pre-recession period. In 2011, across all types of CPG products, 305 billion coupons were distributed in the U.S., representing a decrease of 8.1% from 2010, a record-setting year for distribution. The decline, however, was entirely attributed to 13.1% fewer coupons distributed in the Grocery segment. Overall, 2011 distribution volume is comparatively very strong to 2007 with 20 billion more coupons (+7%) available to consumers.

Overall trends in 2011 were not representative of what marketers were doing across the board for every offer, brand, category or company, says the report. For example, Grocery product marketers reduced the total quantity of coupons they made available in 2011, while Health and Beauty Care (HBC) marketers maintained a steady volume of coupons to promote their products to frugal-minded shoppers. Also unique about 2011 was the 2nd half of the year when coupon distribution shrunk by 10.4% compared to the same period the prior year; yet, overall consumer redemption grew 9.2%.

While Grocery decreased distribution, they maintained the same year-over-year redemption volume with suppressed offer characteristics. Within the Grocery segment, however, the Candy & Gum, Butter & Margarine and Dried Fruit categories all increased their distribution of coupons, among others, landing these three categories on the top 10 list for highest distribution growth in the year. 

Overall in 2011, 89.4% of all coupons were distributed via Free Standing Insert (FSI) formats, including co-op, solo, and shared mail. With fewer total coupons offered, and strong consumer responsiveness, redemption rates for FSI coupons increased 11.1% on average for Grocery coupons and 25.0% for HBC. Digital coupons, as the newest media choice for marketers to reach consumers, grew with 11% more print at home and paperless offers distributed and tracked on NCH’s database; yet, the total quantity of coupons in these growing formats doesn’t yet exceed 1% of all coupons distributed in the U.S.

In total, consumers saved $500 million more in 2011, a healthy increase in redemption cost for marketers. The report estimates that 76% more products were sold with coupons over the course of recent changes in consumer behavior since 2007, which is providing a more positive return on investment for CPG companies from their consumer promotion budget increases.

The report concludes by predicting that 2012 and forward is expected to continue to be very different than the past, and therefore challenging for marketers to navigate. With slow economic growth and unemployment recovery, and consumer shopping behavior that has been forever impacted by the recession, marketers would be wise to monitor consumer responsiveness closely while maintaining levels of promotional incentives that will ensure the demand for value is satisfied in a highly competitive environment.

For additional information about the study, and access to the PDF file containing more detailed charts and graphs, please visit NCH Marketing here.