PROMOTIONS
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Seven Promotion Trends You Cannot Ignore
Couponing has its own reality show on cable TV. “Extreme Couponing” has generated
lots of buzz among viewers and coupon officials. In the larger sense, it demonstrates
how promotions are changing in a challenging economy.
“What is the consumer attitude toward coupons? They are cool. People want to use them.
That wasn’t the case five years ago,” said Matthew Tilley, Director of Interactive Communications for Inmar.
Through the third quarter of this year, coupon redemption was up 5% over last year. That makes seven consecutive quarters of growth, which followed three straight quarters of decline.
So what’s going on?
Coupons are part of a promotion industry that is undergoing change. Tilley lists seven promotion trends that, he said, “You cannot ignore.”
Networked Consumers
Consumers have always been networked, but technology today makes it easier and faster. For example, Facebook in 2011 has 200 million users in the U.S. By contrast, there were 47 million subscribers to Sunday newspapers in 2009.
“We spend a lot of time on social media networks,” said Tilley. “They have really changed the way consumers think about interactions. Not everybody is on Facebook, but when they are, brand messaging can be very compelling.”
Digital Revolution
More brands are issuing digital offers to consumers. In fact, digital promotions have increased 472% from 2009 through June 30, 2011, according to Inmar. The top ten product categories for redeemed digital coupons are paper products, pickles/relish, pet food, yogurt, juice, vitamins, frozen pizza, soup, frozen entrees, and milk.
Total digital coupons processed by Inmar increased 137% from 2009 to 2010, and 27% from 2010 through Oct. 3, 2011. Not surprisingly, the top digital coupon brand submitters are giants such as P&G, General Mills, Johnson & Johnson, Kraft Foods, Unilever, and others.
Rise of the Super Saver
According to the Food Marketing Institute’s grocery shopping report, four of ten consumers (42%) are changing their buying habits. They occasionally shop at other outlets to capitalize on sales and specials, and some even change their primary store altogether to shop at a supermarket with lower overall prices.
Very heavy coupon users are the only group whose percentage of products bought is increasing. The average “coupon enthusiast” is a college-educated female head of family of three members and a household income of $70 thousand to $99.9 thousand. Meanwhile, average non-coupon users are largely senior singles, Hispanic, and rural dwellers.
Coupon enthusiasts, who use an average of 180 coupons per year, represent 13% of all U.S. households. That 13% is buying 19% of products in stores - with or without coupons. It is the only segment showing an increase in food and non-food products bought. Every other segment is buying less.
“Consumers are becoming much more frugal,” said Tilley. “They are looking to save in lots of ways. They are more promotionally savvy today.”
New Competitors
The Great Recession created a New Normal of frugality and put store brands in the spotlight. Surveys show that private label brands are rated excellent or good by a large segment of consumers. In fact, half of consumers (51%) in the FMI study rate private label brands bought at their primary stores as “good,” while four of ten (40%) say “excellent.”
“It’s a trend you can’t ignore - whether you are a brand, a private label manufacturer or a retailer,” said Tilley.
Store as a Marketing Vehicle
Shoppers today expect an experience when they are in the store. They don’t view the store as a warehouse where they go to pick up products.
“It is a shopping experience and they want to be handled appropriately. This is an opportunity for marketing,” Tilley said.
For example, in-store coupons such as at-shelf and instant-redeemable - generate high redemption rates. For the latter, the rate is 23.11%.
Green Is Good
The sustainability movement nowadays involves a mix of legislation, cost savings, moral high ground and public sentiment. Shoppers take part by recycling cans and paper, reusing plastic grocery bags, using energy-saving light bulbs, and other everyday efforts.
“But don’t overlook promotions as a contributor to ‘green’ efforts,” Tilley said. “Marketers can take part by leveraging three areas: in-store marketing, social networks and digital marketing.”
You Need Money to Make Money
Every company’s goals are to increase sales, profits and share vs. the competition. To that end, promotions work.
In planning for the future, Tilley stressed the following:
- Deploy promotions as a strategy, not a reaction
- Focus on targeting rather than mass marketing
- Explore options
- Integrate digitally.
This article was based on a presentation by Matthew Tilley, Director of Interactive Promotions for Inmar, at its recent Promotions Forum in Dallas. For more information, visit www.inmar.com.
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