Despite evidence that the recession may be behind us, consumers continue to use coupons. CPG marketers have realized that coupon distribution is an effective way to attract new customers, especially when budgets are tight. To entice more consumers to try specific products, CPG manufacturers distributed 176 billion coupons during the first half of 2010, a level which is 11.4% higher than the same period last year. While the rate of coupon redemption is about the same, 0.966%, the total numbers redeemed have increased – to 1.7 billion so far this year.

For the most part, coupons are distributed via free standing inserts:

  • FSIs 85%
  • Handout 5.4%
  • Direct Mail 3%
  • Magazine 2.8%
  • In/On pack 1.8%
  • Internet 1.2%
  • Newspaper 0.7%
  • Military 0.1%

While manufacturers are increasing their distribution volume in most channels this year, the change in the Internet channel is highly significant. Using 2009 as a baseline index (100), Internet channel distribution jumped to 179 in the first half of 2010.

The largest growth rates in coupon redemption between 2009 and 2010 occurred in the following retail channels:

  • Grocery stores 7.9%
  • Mass merchandisers 4.6%
  • Drug stores 3.5%
  • Military commissaries 7.9%
  • Other ( convenience stores, warehouse clubs, variety stores) 36.6%

There’s also some evidence that marketers are attempting to manipulate consumer behavior by adjusting coupon terms. The average face value of a coupon has increased to $1.43. But to earn that reward, consumers have less time to make the purchase – 9.5 weeks. And in 26% of cases, consumers must make multiple purchases to qualify.

[Source: Mid-Year 2010 CPG Coupon Industry Facts. NCH Marketing. July 2010. Web. 5 Aug. 2010]