March 20, 2011

A new analysis from Knowledge Networks suggests that digital print-at-home coupons are more powerful than print FSI (free-standing insert) coupons at getting consumers to try a product for the first time – but yield an 18% lower ROI than print FSI coupons.

The study of coupon users is drawn from KN’s National Shopper Lab, a research-ready panel of 23 million loyalty card shoppers across the supermarket and drug store channels; Neal Heffernan of Knowledge Networks shared the new findings recently at the Association of Coupon Professionals (ACP) conference.

The Knowledge Networks analysis – which focuses on coupon trends from 2008 (the beginning of the recession) through 2010 – shows that digital print-at-home coupons

* attract more new buyers by 35%,

* drive more incremental redemptions by 13%, and

* yield 18% lower ROI than print FSIs (with ROI defined here as incremental profit divided by the cost of the couponing program)

The new findings also reveal coupon use among different consumer groups; the analysis has been keyed to 21 Acxiom PersonicX Life Stage groups and shows that:

* high-income young adults ("Taking Hold" group), Generation X ("GenX Singles"), and fledgling members of the workforce ("Beginnings") recorded some of the highest increases in overall coupon use, jumping by anywhere from 26% to 40% between 2008 and 2010, and

* well-off Baby Boomers ("Boomer Barons") and large families ("Jumbo Families") were among the strongest users of digital and paper coupons alike,

"Although the bulk of the coupon business is still paper, digital coupons are doing an excellent job of attracting more affluent, savvy consumers," said Heffernan, Senior Vice President and General Manager at Knowledge Networks. "Digital print-at-home coupons yield a lower ROI due to their higher redemption rates and the historically low distribution costs for print FSI coupons; but digital coupons have established a foothold with some key consumers that every brand wants to be friends with – such as large families and high-income Boomers."

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