Free Standing Insert (FSI) coupon activity increased 8.0 percent during 2009 versus the previous year to more than 272 billion Coupons Dropped according to Marx Promotion Intelligence, a division of TNS Media Intelligence. This activity level is the highest yearly Coupons Dropped observed during the past decade, surpassing the second highest annual Coupons Dropped of 257 billion realized in 2007.
Marx Promotion Intelligence, the industry standard for tracking FSI coupon activity, reports that retailer promotion pages also achieved new record levels with a 37.7 percent increase to more than 9.0 billion pages in 2009, continuing the pattern of significant annual growth rates which 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 during this period, 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 Mark Nesbitt.
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Corporate “scale” events continued to grow as a promotion tactic in 2009. Scale events included both manufacturer solo inserts in which the entire vehicle is comprised of 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 5th having the greatest activity with a weighted average circulation of 144 pages. The “New Year” promotion week of January 4th (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,” said Mark Nesbitt.
Overall FSI Activity
During 2009, more than $385 billion in consumer incentives were delivered via FSI coupons, up 15.0 percent from 2008. During the same period, over 272 billion coupons were distributed within more than 203 billion FSI pages. FSI coupon average Face Value achieved a new record level in 2009 at $1.42, up 6.5 percent versus 2008. However, Average Expiration (Fuse) remained below ten weeks with a decrease to 9.3 weeks, down 3.9 percent versus a year ago. 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 as the largest user of FSI pages with a 71.5 percent share, followed by Direct Response, which includes general advertising activity, and Franchise, comprised of 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 versus 2008.
Top 10 Retailers based on Pages Circulated
Retailer promotion pages increased 37.7 percent to more than 9.0 billion pages in 2009. Target continued to lead with more than 1.8 billion pages, up 43.9 percent versus 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.
Top 10 Categories for New Product Activity
During 2009, there were 388 new products that delivered FSI coupons across 788 event dates as part of their introduction, averaging 2.0 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.
CPG Non-Food vs. Food
In 2009, Non-Food categories distributed more than 160.9 billion coupons, up 5.3 percent versus a year ago, driven by the 7.7 percent increase within the Personal Care area. Food categories distributed 111.6 billion coupons, representing an increase of 12.4 percent, led by the 7.8 percent increase for the Dry Grocery area. Eight of the 9 areas defined by Marx Promotion Intelligence reported increases in Coupons Dropped during this period with Cereals being the only area with a decrease in 2009 versus 2008.
Additionally, manufacturers are increasing the value of the offers being delivered to consumers in both the Non-Food and Food segments. Weighted Average Face Value (WAFV) for Non-Food increased 7.4 percent to $1.73 and was combined with a 0.8 point decrease in Multiple Purchase Requirements (MPR) resulting in Weighted Average Face Value Per Unit (WAFVPU) increasing 8.1 percent to $1.54. Similarly, WAFV for Food increased 7.5 percent to $0.97 and was combined with a 0.3 point increase in MPR resulting in WAFVPU increasing 7.3 percent to $0.73. These changes appear to be a response to economic pressures to increase the perceived consumer value of each offer relative to retail price.
2009 versus 2008
Top 10 FSI Product Types in 2009
The top 10 product types based on Coupons Dropped accounted for 34.8 percent of all FSI coupon activity during 2009. Combination/Personal products (comprised of Personal Care brands which are promoted across multiple individual Personal Care categories) ranked first and increased 7.5 percent to distribute more than 13.3 billion coupons. Pet Food & Treats took second place with a 4.0 percent increase to 13.1 million coupons.
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