SAN ANTONIO -- Coupon distribution and redemption declined for the first time in 23 years in 1993, according to a couponing industry expert.
Coupon use dropped because marketers are turning to more targeted media, the expert said, speaking at the Association of Coupon Processors' Spring Conference and Industry Forum held here last month. In addition, shorter coupon expiration dates and an improved economy played roles in the decline.
"In 1993 we saw a decline of 3.7% in coupon distribution from 1992. There was an increase in the fourth quarter but, according to our numbers, it didn't raise it enough to increase distribution for the year," said Jane Perrin, senior vice president of marketing at NCH Promotion Services, Lincolnshire, Ill.
Perrin said grocery products coupons were down 4.2%. While coupons for health and beauty aids fared slightly better, "we saw a decline in most major product categories," she said.
Perrin said much of the decline in coupon distribution came because there has been a shift in promotional spending by manufacturers.
"Manufacturers are looking at more targeted vehicles. They are taking dollars out of large national drops and asking how they can target their dollars more effectively," she said.
While freestanding inserts are still the dominant coupon distribution vehicle, comprising 82.9% of all coupons distributed, FSI distribution declined slightly over the past year, Perrin said.
"The category that has shown the most growth is in-store distributed coupons, which includes
handouts, coupon machines and other methods of giving away coupons in the store. They are now at 4.6% of the total market. Catalina and other electronic coupons are 0.8% of all coupons distributed," she said.
The coupon redemption rate declined 12% to 6.8% in the course of 1993. "Distribution is the primary driver behind redemption. There are a lot of other drivers, but unless you've got the coupons you can't use them," she said. "From 1990 to 1992 we saw an increase of redemption that was primarily driven by the economy. When gross domestic product goes down, coupon usage goes up. We have seen this correlation over the last 25 years," she said.
"All but one of the top 12 companies distributing coupons reduced distribution in 1993. The improving economy is another factor."
Perrin said her information was compiled from a variety of industry sources, including NCH's sister company Nielsen Marketing Research, ActMedia, Catalina, News America and Sullivan.
"Manufacturers have shortened the expiration cycle of coupons to an average of 3.1 months. They have been shortening the life cycle all along, but the jump from 1992 to 1993 was very significant. In 1992 it was four months. This is primarily because manufacturers are saying that they are going to limit their liability. "In 1992 there were 406 available coupons per month for each consumer. In 1993 it was 301. Taking into account the decline of distribution and the decline for expiration, you are down 26% in coupon usability. So I don't think that consumers did too bad, only declining consumption by 12%, when the number of coupons that they had that were usable declined 26%," Perrin said.
Perrin said consumer savings showed a decline over the past year from $4.47 billion to $4 billion. Excluding in-ad coupons, the average face value of a coupon is 59.5 cents.
Coupons are still used across all segments of the population, Perrin said. "The percentage of consumers who use coupons is 71%. Coupons are used across all age groups. In fact, 64.4% of 18-to 24-year-olds use coupons on a regular basis. That is a high number.
"On a geographic basis, the lowest use of coupons is in the Southwest, where 61.7% of consumers use them, and the high is in the Northeast, where 77.7% of consumers use them. And 55.4% of the population shopped at stores that doubled or tripled coupons," Perrin said.
Cities with high concentrations of double and triple coupons include Atlanta, Baltimore, Boston, Buffalo-Rochester, Cincinnati, Columbus and Denver, she said.
