August 30, 2002

CoolSavings, Inc. announced the results of a new national study of American coupon usage and promotional habits conducted by market research leader NFO WorldGroup. Among the topics covered, the 2002 "U.S Coupon Trends" report examined the role of the Internet in consumer coupon behavior, as well as the attitudes and actions of Internet coupon users in comparison to users of traditional coupon media such as the newspaper.

Overall, the study found that Internet coupon users and traditional coupon users are virtually the same in terms of their motivations and behavior. Both groups--which were found to share a similar composition of approximately 85% women--indicated that the primary reason they use coupons is "to save money on my favorite brand", with the secondary reason being "to try newly introduced products or brands." By comparison, only a minority of each group indicated that they "usually compare prices and only buy the cheapest product, including private label and store brands." Ultimately, when it comes to making a purchase, both groups similarly reported basing their final purchase decisions on three primary factors: category-specific brand requirements, price and promotional activity.

"Together these findings show that Internet coupon users, like traditional coupon users, employ a variety of factors when making purchase decisions, not just price," commented Mathew Moog, president and chief executive officer of CoolSavings, Inc. "And, they are proven brand-oriented shoppers whose primary motivation for using coupon promotions is not getting the cheapest product, but saving money on favorite brands."

Despite the similarities between the two groups, the study also found that Internet coupon users and traditional coupon users differ significantly in three key areas: family size, grocery spending and brand loyalty. Internet coupon users, in fact, were shown to be 110% more likely to have large, 4+ member families than traditional coupon users, and they spend over 30% more on groceries on a weekly basis, across all product categories. As for brand loyalty, while traditional coupon users are shown to be more heavily focused on price and promotion, Internet coupon users are more likely to buy the brands they prefer, across almost all product categories studied.

"Brand marketers should take note: Internet coupon users are valuable consumers who should be actively targeted," said Moog. "Importantly, last year the Newspaper Association of America reported that only 65% of American households read the Sunday newspaper, reflecting a downward trend that began in the early 1970's. Compare this to the fact that 84% of all coupons were distributed through the newspaper last year,(a) and you'll see that brand marketers are currently missing out on a valuable consumer segment."

The "U.S. Coupon Trends" study was conducted over a six-week period during the first quarter of 2002. NFO WorldGroup drew from a representative, nationally balanced panel of offline and online households, which included 265 traditional coupon users and 256 Internet coupon users (521 total). Traditional coupon users were classified as those who have used more than six of any coupons, promotions or rebates in the past four months, sourced from newspaper free standing inserts, magazines, direct mail or other sources. The Internet coupon users participating in the study were those who used more than two of any coupons, promotions or rebates in the past four months sourced through the Internet.

"We believe the results of the "U.S. Coupon Trends" report will be interesting for the market," commented Mark Berry, president, NFO InDepth Interactive, the division of NFO WorldGroup that conducted the study. "As a leader in marketing research and counsel, we strive to provide information that will be a valuable resource to help the industry, as well as our clients, make important strategic decisions."

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