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    FSI Activity Greatest in 10 Years: Study

    According to the “7th annual FSI Distribution Trends Report,” last year free-standing insert (FSI) coupons saw their greatest activity in 10 years, with more than 272 billion coupons dropped — an 8 percent increase over last year.

    According to the “7th annual FSI Distribution Trends Report,” last year free-standing insert (FSI) coupons saw their greatest activity in 10 years, with more than 272 billion coupons dropped — an 8 percent increase over last year. The study comes from Marx Promotion Intelligence, a division of Minneapolis-based TNS Media Intelligence.

    In addition, retailer promotion pages also achieved new record levels, with a 37.7 percent increase to more than 9 billion pages in 2009, continuing the pattern of significant annual growth rates that began in 2007.

    “As consumers adapt to new economic realities, marketers are increasing their use of FSI coupons within their marketing mix to deliver advertising impact, influence consumer behavior, and secure retailer distribution and merchandising,” said Mark Nesbitt, president, TNS Media Intelligence. “Leading retailers are also increasing their use of FSI vehicles to drive planned shopping trips and build shopper loyalty. Manufacturers and retailers are working together to deliver relevant incentives to their consumers and shoppers during increasingly difficult economic times. Although shopper marketing tactics are still evolving, FSIs have clearly emerged as a key component of manufacturer- and retailer-aligned promotion programs.”

    FSI coupon support was included as part of 388 new product introductions last year, up from 334 during 2008. “After a decline in new product activity in 2008, manufacturers again appear to be investing in innovation to grow their brands,” said Nesbitt.

    Corporate “scale” events also continued to grow as a promotion tactic in 2009. These events included both manufacturer solo inserts in which the entire vehicle comprises events from a single manufacturer and multiple-page corporate themed events that are distributed within cooperative FSI coupon vehicles. Corporate scale events contributed in part to the “pre-Easter” promotion week of April 5 having the greatest activity, with a weighted average circulation of 144 pages. The “New Year” promotion week of Jan. 4 (traditionally the heaviest-weighted week of the year) was the second most active week in 2009, with 136 pages of FSI promotions.

    “Manufacturers are using corporate scale FSI coupon events as an effective advertising vehicle to leverage their brand portfolios to break through the promotion clutter and engage their consumers while also creating a more robust merchandising opportunity for their retailer partners,” noted Nesbitt.

    During 2009, more than $385 billion in consumer incentives were delivered via FSI coupons, up 15 percent from 2008. During the same period, over 272 billion coupons were distributed within more than 203 billion FSI pages, according to the data. FSI coupon average “face value” achieved a new record level in 2009 at $1.42, up 6.5 percent vs. 2008. However, average expiration decreased 3.9 percent from last year, to 9.3 weeks. According to TNS, these trends indicate that manufacturers are delivering more offers of greater value to the consumer, but are managing their financial exposure by reducing the length of time that these offers are available in the market.

    The consumer packaged goods (CPG) sector remained the largest user of FSI pages, with a 71.5 percent share, followed by direct-response marketing vehicles, which include general advertising activity, and franchise (restaurants, portrait studios and other businesses). CPG and franchise increased 6.1 percent and 10.3 percent, respectively, in number of pages distributed, while direct-response posted a 5.8 percent decrease vs. 2008.

    Retailer promotion pages increased 37.7 percent to more than 9 billion pages in 2009. Target continued to lead, with more than 1.8 billion pages, up 43.9 percent vs. 2008. Dollar General increased 386.2 percent to more than 885 million pages, to rank third during 2009. Family Dollar also moved up from 17 in 2008 to sixth in 2009, with a 227.4 percent increase in retailer promotion pages, reflecting the potential importance of FSI coupons within the extreme-value channel.

    Similarly, Walgreens, CVS/pharmacy, and Rite Aid were each within the top 10, indicating that FSI coupons may also be an effective promotion vehicle for retailers within the drug channel. These trends reflect the overall growth of retailer promotion within traditional FSI vehicles to drive shopping trips, transaction size and overall profits across channels and retail formats.

    During 2009, there were 388 new products that delivered FSI coupons across 788 event dates as part of their introduction, averaging two event dates per new product. This activity is up from 334 new products, 635 event dates and 1.9 event dates per new product during 2008. The snacks category led, with 30 new products, followed by alcoholic beverages, with 25 new products, and cereals, with 24 new products.

    In 2009, nonfood categories distributed more than 160.9 billion coupons, up 5.3 percent from a year ago and driven by the 7.7 percent increase within the personal care area. Food categories distributed 111.6 billion coupons, an increase of 12.4 percent over last year, led by a 7.8 percent increase for the dry grocery area. Cereals were the only area with a decrease in 2009 vs. 2008.

    The top 10 product types, based on coupons dropped, accounted for 34.8 percent of all FSI coupon activity during 2009. Combination/personal products (comprising personal care brands that are promoted across multiple individual personal care categories) ranked first and increased 7.5 percent over last year, to distribute more than 13.3 billion coupons. Pet food and treats took second place, with a 4 percent increase to 13.1 million coupons.

    The “7th annual FSI Distribution Trends Report” is available at www.tnsmi-marx.com.

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