a l ook at t rends in p romotion a ctivity and s hopper b ehavior senior analytics lead, promotion...

A LOOK AT TRENDS IN PROMOTION ACTIVITY AND SHOPPER BEHAVIOR

Senior Analytics Lead, Promotion Analytics / InmarAndrew W. Coleman

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Session agenda

1. Introduction

2. Definitions and methodology

3. Topline findings

4. Economic conditions

5. Promotion landscape

6. NEW: Canadian trends

7. Spotlight: Digital trends

8. Conclusions and predictions

9. Questions

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• Senior Analytics Lead, Promotion Analytics• Background in creative and digital brand

management• Agency and client-side perspective• Loves data, hates buzzwords• New dad

© 2015 Inmar, Inc. 4

Distribution and redemption data consolidatedfrom the Inmar coupon database.

Percent change compares activity throughout 2014 with activity from 2013.

Industry distribution and redemption statistics extrapolated using Inmar and Kantar Media data.

Analysis conducted to develop key insights.

Data cross-checked with major coupondistributors and third-party vendors.

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• Manufacturer offers vs. coupon codes

• Digital vs. digital-ish

• Convenience vs. accuracy

• IR vs. IRC

• DEP (Dual electronic and paper)

• EC (Electronic checkout)

• EDO (Electronic discount opt-In / load2card)

• FSI (Free-standing insert)

• HO (Handout)

• IR (Instant redeemable)

• NET (Internet printable / print at home)

• SP (Shelf pad)

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2013 2014

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2013 2014

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Source: 2014 Inmar Coupon Trends

Free-standing insert

Up from 87.4 % in 2013

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Free-standinginsertDown from 40.0%

in 2013

Source: 2014 Inmar Coupon Trends

Electronic checkout

Shelf pad

Direct mail

Internet

Other

Instant redeemableInstant redeemable cross ruff

Dual electronic and paper

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January February March April May June July August September October November December0

20

40

60

80

100

120

140

160

180

20102011201220132014

Source: 2014 Inmar Coupon Trends

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January February March April May June July August September October November December50

60

70

80

90

100

110

120

130

2010

2011

2012

2013

2014

Source: 2014 Inmar Coupon Trends

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2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Source: 2014 Inmar Coupon Trends

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2013 2014Source: 2014 Inmar Coupon Trends

Non-Food

FoodFood

Non-Food

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2013 2014Source: 2014 Inmar Coupon Trends

Non-Food

FoodNon-Food

Food

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FSI IR EC SP NET EDO HO0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Average Redemption Rate: 2014

Free-Standing Insert Instant Redeemable Electronic Checkout Shelf Pad Internet Printable/Print at Home

Electronic DiscountOpt-In / Load2Card

Handout

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FSI IR EC SP NET EDO HO0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Average Redemption Rate: 2014

Free-Standing Insert Instant Redeemable Electronic Checkout Shelf Pad Internet Printable/Print at Home

Electronic DiscountOpt-In / Load2Card

Handout

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Gas prices falling

Consumer confidence increasing

Unemployment rate falling

Misery index falling

Retail improving, but CPG eCommerce lagging

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Baskets and trips on the rise

Face values getting sweeter

Units holding steady

Shrinking redemption period

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Average face value distributed

Average purchase requirement distributed

Averageredemption perioddistributed

Source: 2014 Inmar Coupon Trends

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New Product Event Dates in 2014(814 in 2013)

New Products Promoted via FSI in 2014 (412 in 2013)

Categories Featuring New Product Events in 2014

(96 in 2013)

Source: Marx / Kantar Media

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FSI IR EC SP NET EDO HO$1.00

$1.10

$1.20

$1.30

$1.40

$1.50

$1.60

$1.70

$1.80

$1.90

$2.00

201420132012

Average face value distributed

Source: 2014 Inmar Coupon Trends

Free-Standing Insert Instant Redeemable Electronic Checkout Shelf Pad Internet Printable/Print at Home

Electronic DiscountOpt-In / Load2Card

Handout

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FSI IR EC SP NET EDO HO1.00

1.20

1.40

1.60

1.80

2.00

2.20

201420132012

Average purchase requirement distributed (units)

Source: 2014 Inmar Coupon Trends

Free-Standing Insert Instant Redeemable Electronic Checkout Shelf Pad Internet Printable/Print at Home

Electronic DiscountOpt-In / Load2Card

Handout

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FSI IR EC SP NET EDO HO0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

201420132012

Average redemption period distributed (months)

Free-Standing Insert Instant Redeemable Electronic Checkout Shelf Pad Internet Printable/Print at Home

Electronic DiscountOpt-In / Load2Card

Handout

Source: 2014 Inmar Coupon Trends

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Average purchase requirement distributed

Average redemption perioddistributed

Average face value distributed

Source: 2014 Inmar Coupon Trends

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< $25K

$25K - $34K

$35K - $49K

$50K - $69K

$70K - $99K

$100K - $124K

$125K - $149K

$150K - $199K

$200K +

140

142

141

138

139

140

146

144

142

Basket Ring Per Trip Trips Per ShopperSource: Nielsen Homescan, 52 w/e 12/28/2013 - excludes gas-only or Rx-only trips

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2012 2013 20140.0

2.0

4.0

6.0

8.0

31

(Bill

ions

)

Source: 2014 Inmar Promotions – Canada

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2012 2013 20140.0

20.0

40.0

60.0

80.0

100.0

120.0

32

(Mill

ions

)

Source: 2014 Inmar Promotions – Canada

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Source: 2014 Inmar Promotions – Canada

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2013 2014

Source: 2014 Inmar Promotions – Canada

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FSI

In/On Pack

In Store

Direct Mail

Magazine

Internet

Other

2014Source: 2014 Inmar Promotions – Canada

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Source: 2014 Inmar Promotions – Canada

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• Still a small share of distribution

• Declining share of redemption

• Rich face values

•Wide range of redemption rates

– Overall average:

– “Middle half” spans

Source: 2014 Inmar Coupon Trends

2013: 5.0%

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• Similarly small share of distribution

• Growing share of redemption

• Decent face values

• Average redemption rates:

‒ Overall average:

‒ “Middle half” spans

2013: 0.9%

Source: 2014 Inmar Coupon Trends

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• Large share of distribution

• Large share of redemption

• Average face value

• Average redemption rate

‒ Overall average low

‒ Middle half spans

Source: 2014 Inmar Coupon Trends

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“The eventuality of the world is a one-to-one relationship with every consumer which results

in trust, loyalty – all the things that a brand wants.”1

“I think the days of traditional mass marketing are kind of over. Marketing has

to be a conduit into the multi-screen world that everyone’s living in. How do you create

a two-way conversation?”2

SOURCE: 1) AdAge, AdAge Digital A-List: P&G, February 2011. 2) Business Insider, Frito-Lay CMO: The Days of Traditional Mass-Marketing are Over, July, 20, 2012

Bob McDonald Former CEO & Chairman of the Board, Procter & Gamble

Ann Muhkerjee,SVP and CMO,Frito-Lay North America

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SOURCE: 1) L2 Business Intelligence for Digital, “Where Consumers Look for Grocery Coupons”, 2) Institute for Advanced Analytics, NCSU September 2014,

3) Knowledge Networks , Trend Report 2011; Coupons .com Digital User Behavior presentation 20114) 2014 Redemption Statistics, Hopster Coupon Platform

Engagement coupons generate 5x redemption of traditional print-at-home coupons4

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• Multiple print technologies

• Industry best security options

• Seamless media integration

• Robust data capture

• Integrated engagement activities

• Accepted at all retailers

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• Personalized emails delivered through retail partners

• Targeting capabilities match offers with shoppers

• Maximize promotional dollars with targeted offers

• Robust financial and behavioral data capture

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In our client conversations, we have heard:

• Consumer promotion budgets have been shrinking and/or shifting (from national programs to retail-specific / shopper marketing / activation strategies).

• Despite these cuts, brands continue to use remaining budgets to evolve their marketing mix: to reach new shoppers, leverage new technologies and lead innovation in their categories.

• There are also new and different ways to distribute offers that bypass traditional clearing and settlement processes.

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• Ongoing decline of paper redemptions

• Continued rapid growth of digital distribution AND redemption

• Increased adoption of digital platforms by retailers

• Increasing sophistication across targeting methodologies

• Shoppers will continue to look for deals beyond established

distribution methods, and reward the companies that make it easy for

them to participate

• 10-digit mobile overtakes email address as primary unique identifier

• Coupon offers delivered directly to your Oculus Rift*

Not intended to be a factual prediction

andrew.coleman@inmar.com@andrew_coleman336.631.2973

Andrew Coleman