March 19, 2013 in Business

Consumer use of coupons plunged in 2012

Experts uncertain about cause
Mcclatchy-Tribune
 
Down 17 percent

Last year, U.S. consumers redeemed 2.9 billion coupons on consumer packaged goods, compared with 3.5 billion coupons redeemed in 2011.

The number of coupons used by Americans to stock their pantries plummeted in 2012 – down 17 percent.

After surging during the recession, the old-fashioned savings tool seems to have lost favor among consumers. Or has it?

Coupon industry insiders disagree on whether the drop is an aberration caused by a poor mix of coupon offers in 2012 or whether it signals the beginning of the end of the paper coupon era.

“There’s a lot of discussion within the industry,” said John Morgan, executive director of the Association of Coupon Professionals, the coupon industry’s trade organization.

“The industry is not used to having double-digit (swings) either way,” Morgan said. “That’s a big deal. Historically, it has been slow single-digit (increases or decreases) either way.”

With an uneven economic recovery as the backdrop, coupon-clipping shoppers have taken notice.

Kim Maney, 38, of Apex, N.C., shops at multiple supermarkets and drugstores, follows coupon blogs and takes advantage of double- and triple-coupon offers to stock her pantry. A lawyer, wife and mother of a 2-year-old, Maney said she has noticed a drop in the quality of paper coupons.

“A quarter off toilet paper? Really? What am I going to do with that?” said Maney, who admits to being “horrified by the idea I’d have to give somebody full price for something.”

Last year, U.S. consumers redeemed 2.9 billion coupons on consumer packaged goods, which includes everything from cereal to toilet bowl cleaner. That’s according to the most recent tally by NCH Marketing, a Deerfield, Ill.-based company and one of the country’s major coupon clearinghouses. NCH is a division of Valassis, which publishes the Red Plum coupon inserts for newspapers.

The 17.1 percent drop in 2012 is even more dramatic considering the total number of coupons made available – paper and digital – remained steady at 305 billion.

Charlie Brown, vice president of marketing at NCH, attributes the decline to a calculated move by manufacturers to correct an “unusually high” redemption rate in 2011.

Coupon redemption reached 3.5 billion coupons redeemed in 2011, a 6 percent increase over the previous year and a 26 percent increase since before the recession.

During the worst of the economic downturn, Morgan said, “marketers ramped up (coupon offers) to protect their market share.”

In 2012, manufacturers put the brakes on coupons. The coupon values became skimpier, the expiration dates shorter, and oftentimes the coupons required that shoppers buy two or even three of an item before getting 55 cents off.

Manufacturers also issued more coupons for new products, which Brown said, “doesn’t have the same level of appeal.”

“For the manufacturer, the redemption of the coupon is an expense,” he said, so they purposely made the coupon offers less attractive.

Phil Lempert, a consumer analyst known as the Supermarket Guru, said he thinks the discussion about coupon expiration dates and lower coupon values, while valid, misses the point.

He argues that paper coupons, in particular, are an outmoded way of delivering deals to consumers, pointing out that only about 1 percent of all coupons are redeemed – even in a good year.

A contributing editor to Supermarket News, Lempert is the keynote speaker at the Association of Coupon Professionals annual meeting in New Orleans next month. He forecasts continuing drops in paper coupon redemption.

“We’ll continue to see people empowered to save money but not the way it used to be,” he said. As of 2012, about 90 percent of all coupons were still distributed in coupon books, the vast majority delivered via the Sunday newspaper. Thus far, the so-called “click-to-card” digital coupons that shoppers load to their store loyalty cards have amounted to only about 1 percent of coupons distributed, and redemption is similarly small.

But Inmar, a Winston Salem, N.C.-based company that analyzes coupon use and also operates paper coupon clearinghouses, is forecasting a surge in the popularity of paperless coupons. It’s projecting a nearly 900 percent increase in paperless coupons by 2015.


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