Coupon Trends Overview, 2003

In 2003, marketers continued to fine-tune coupon promotional tactics by distributing fewer, but more targeted, coupon offers. Consumers responded favorably by pushing average redemption rates upward. Influenced by P&G's success with the monthly brandSaver coupon insert program, marketers increasingly reached out to specific consumer groups, such as Hispanics, with more targeted offerings versus national mass coupon drops. As a result, overall distribution of manufacturer's coupons dipped 5.6% to 314 billion, offering consumers $267 billion in potential savings. The average face value of manufacturer's coupons increased 4.9% to $.85 -- more than double the pace of the consumer price index, which climbed 2.3% in 2003. The percentage of coupons requiring multiple purchases decreased 1% and the average expiration period remained relatively stable at 3 months. Manufacturer offers are just one slice of the coupon pie. Retailers are increasingly turning to coupon promotions to help attract, retain and reward loyal shoppers. Ranging from simple offers to "double the face value of manufacturer's coupons" to collaborating with manufacturers on store-specific promotions, retailers view coupons as a new weapon in their competitive arsenal. Coupon shoppers typically have larger families and buy more groceries -- they plan their shopping and load their carts. And retailers are realizing the power coupons have to lure these value-minded shoppers and compete more effectively with Wal-Mart. Some are even using trade dollars to create their own coupon booklets or targeted direct mailers, which may feature manufacturer-branded products along with their own private labels. These "store coupons" do not flow through the typical clearinghouse channel, and are not currently included in industry reports. Coupon redemption patterns continue to be influenced by the consumers' search for deals. Many shifted some of their grocery spending, especially for non-food products, from conventional supermarkets to alternative retail shopping channels, most notably to mass merchandisers, dollar stores and warehouse clubs. Consumers are planning their shopping trips to these other channels -- and are taking their coupons along with them. But many warehouse clubs do not yet accept manufacturer's coupons. As a result, redemption of manufacturer's coupons fell 3% to 3.5 billion coupons; but consumers still managed to save $2.8 billion.

Coupon Trends Overview, 2003

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