The recession didn't help many industries, but it may prove the savior of print coupons. Even consumers in their 20s and 30s appear to be adopting the coupon-clipping habit, defying what once looked like long odds, declining newspaper circulation and the growth of digital media.
Newspaper inserts still prevail, but as a younger generation gets hooked on print coupons, they'll likely be ones that arrive in the mail or from their own printers. And that doesn't even factor in the harder-to-quantify growth of mobile coupons, which don't go through clearinghouses.
Last year, redemption of coupons that do go through clearinghouses surged 23% to 3.2 billion coupons (and up 30% to $3.5 billion in value) in the U.S., the first gain in 17 consecutive years, according to data from Valassis Communications, which also owns NCH, one of the largest coupon clearinghouses.
Maintaining growth against comparisons like that seemed unlikely going into 2010, particularly amid a recovery, however mild. Yet it's happening. Through the first nine months of 2010, coupon redemption is up another 5.3% to 2.5 billion vs. the year-ago period, with the value of coupons redeemed up 7.7% to $2.8 billion.
Despite rapid growth, internet coupons still account for only 1% of distribution. The majority of overall growth in redemptions still come from free-standing print inserts, which accounted for more than 2.1 billion redemptions overall last year, according to NCH data.
Coupons could be helping to prop up Sunday newspaper circulations, which fell 4.5% in the six months ended Sept. 30 vs. a year ago but did a bit better than the 5% decline in daily circulations.
For newspapers in Minneapolis, St. Petersburg, Baltimore and seven key Gannett markets, Sunday circulations actually rose. Many of those newspapers, particularly the Gannett papers, have focused on their Sunday print editions -- including campaigns to highlight the value of coupons within.
The National Newspaper Network is preparing to release a report later this month showing 91% of consumers ages 25 to 34 use newspaper coupons, a percentage that's in line with historical rates for the age group, said Jason Klein, CEO of the group.
Many marketers cringe at the phrase "the new normal," not only because it's getting shopworn, but because it refers to consumers turning permanently frugal thanks to a deep recession followed by a slow recovery. Not so for the couponing industry, which sees a generational behavior change inherent in that phrase that bodes well for them.
Research from Deloitte, SymphonyIRI and Nielsen among others in the past year all point to consumers spending more cautiously and seeking deals more aggressively for the foreseeable future.
"I think we're seeing this whole recession really helped us pick up those millennials who were not as focused on money management and savings and now have entered the marketplace with a real savings mentality," said Suzie Brown, chief marketing officer of Valassis.
Certainly some marketers have been doing their part to fan the flames with unusually attractive coupon offers. Procter & Gamble Co.'s Old Spice has dropped buy-one-get-one coupons almost continuously since February. Hurt by resulting share losses, Unilever's Axe responded with two BOGO offers of its own the past three months. Birds Eye took the unusual step recently of offering a national coupon for a free full-size package of its Steamfresh products.
COMMENTARY: The Great Recession has created a culture of frugality among consumers. High rates of unemployment, lower incomes and price increases in some consumables has made it necessary for many consumer packaged goods companies to issue discount coupons to entice consumers to save money and purchase more regularly. We are seeing similar patterns in the use of Federal food stamps, with up to 20% of all adult Americans now using food stamps So long as unemployment remains high and there is no major improvement in the overall economy, we can expect discount coupon usage to remain high or even increase.
Courtesy of an article dated November 1, 2010 appearing in Advertising Age
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Posted by: Account Deleted | 04/08/2011 at 09:55 PM