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    PG's Annual Report: Coupon Redemption

    More programs conveying specific, understandable value to shoppers

    By Bridget Goldschmidt, Stagnito Business Information

    The following is part of a series of key highlights from the 82nd Annual Report of the Grocery Industry, which appears in PG’s April 2015 issue. The full report can be found here

    In the area of coupon redemption, PG’s survey finds center store unsurprisingly in the lead, as it was last year, with 50.2 percent of respondents selecting it in 2015. Next are frozen foods (up from last year’s fifth place) and general merchandise, both with 21.1 percent; health, beauty and wellness, at 17.5 percent; and dairy, at 14 percent.

    According to Marx, a solution from Minneapolis-based Kantar Media, retailer participation in free-standing insert (FSI) coupon events and digital coupons distributed on retailer websites benefited from double-digit increases from 2013 to 2014, increasing by 11.8 percent and 16.5 percent, respectively. During this same period, retailer feature ad pages grew 4.2 percent, while overall retailer advertising among CPG retailers declined 2.8 percent.

    “These trends indicate retailer and manufacturer marketing dollars are increasingly being directed toward programs that communicate specific and easy-to-understand value to the shopper,” notes Marx Account Solutions VP Dan Kitrell. “Although retailer advertising provides continuity and builds equity with shoppers, retailer FSI coupon events effectively reach shoppers in the home when they are writing shopping lists and planning shopping trips, while digital coupons distributed on a retailer’s website provide relevant incentives to shoppers who are likely planning a trip to that retailer. Finally, retailer feature ads frequently make the value of the combined offers easier for the shopper to understand by ‘showing the math,’ including regular price, feature price, and net price paid after the coupon savings are applied.”

    Marx noted considerable shifts in advertising and promotion activity among various retailers. For example, Bentonville, Ark.-based Walmart maintained the highest level of actual advertising expenditures and the highest level of participation in retailer FSI promotion pages, and also increased its consumer promotion activity, with a 15.7 percent increase in FSI promotion pages and an 18.4 percent rise in digital coupon events on Walmart.com in 2014. Minneapolis-based Target, meanwhile, had the second-highest levels of advertising expenditures and retailer FSI promotion pages after Walmart, but cut back on advertising by 6.1 percent, FSI promotion pages by 11.1 percent and digital coupon events on Target.com by 36.6 percent in 2014. These advertising and promotion shifts may ultimately lead to shifts in share of shoppers, trips and sales between the two retailers.

    Several leading pure-play grocery retailers — Kroger, Albertsons and Supervalu — lowered their advertising expenditures in 2014. FSI coupon pages and digital coupon events rose for most of these retailers, while retailer feature ad page changes were mixed in 2014.

    “These retailer trends may reflect several factors, including retailers exiting select markets, the sale of retail banners, or a response to retailer-related news stories,” observes Kitrell, adding that manufacturers should time their programs to the specific periods in which a retailer has higher advertising and promotion activity.

    By Bridget Goldschmidt, Stagnito Business Information
    • About Bridget Goldschmidt In addition to serving as Progressive Grocer’s Managing Editor, Bridget writes many print and digital features encompassing a range of grocery and fresh categories across the store. Bridget also enjoys on-site reporting assignments at such key industry events as the New York Fancy Food Show and the International Boston Seafood Show, in addition to visiting stores for PG’s prestigious Store of the Month feature. In her years with the magazine, she has developed into a knowledgeable voice on grocery industry trends, sought by such distinguished publications as The New York Times.

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