first quarter coupon trends update - inmar.com...© 2012 inmar, inc. all rights reserved. not to be...
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® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Third Quarter Coupon Trends Update October 25, 2012
Matthew Tilley Director of Marketing, Promotion Network
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Matthew Tilley [email protected] 336.631.2524
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@matthewjtilley
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Network Orchestrator of Complex Transactions
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•Returns Management •Recall Management •Remarketing •Business Intelligence •Supply Chain Consulting •Field Services •Risk Mitigation
Supply Chain Network
•Digital Promotions •Coupons •Rebates •Promotion Consulting •Business Intelligence
Promotion Network
•Returns Management •Hazardous Management •Recall Management •Pharmacy Reconciliation •Pharmacy Contract
Management •Business Intelligence
Healthcare Network
We operate collaborative commerce networks and make them intelligent.
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Where We’re Going…
• The 4 Key Trends of the Moment –Volatility is the New Normal –Offers Just Aren’t as Attractive –Digital is Quickly Becoming Reality –Shoppers Still Want Coupons
• Looking Ahead • Questions and Answers
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© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Volatility is the New Normal
5
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Unemployment Rate Declines in Q3
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Reported Unemployment Rate
(US) 7.8%
Coupon Redemption Correlation
65%
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Redemption Much More Impact Than Expected!
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-22.9% 680 million
Q3 2012 vs.
Q3 2011
-7.2% Q1 – 760 million -17.0% Q2 – 720 million -15.7% YTD – 2.17 billion
Source: Inmar Coupon Report 2012
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Redemption Declines Across the Board
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Non-food Food -10.7%
Decline -15.3%
Decline H1
Q3
YTD
-22.3% Decline
-23.9% Decline
-14.4% Decline
-18.1% Decline
Source: Inmar Coupon Report 2012
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
ALL Major Methods See Redemption Declines
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Share of Redemption Redemption Volume
Change
Free-standing Insert 37.7% -30%
Instant Redeemable 23.1% -1%
Electronic Checkout 7.9% -7%
Shelf Pad 7.2% -26%
Internet 4.7% -27%
Direct Mail 4.5% -21%
Handout 4.2% -20%
In-pack 2.5% -46%
In-ad 1.7% -25%
Electronic Shelf 1.4% -41% Source: Inmar Coupon Report 2012, Q2 data only
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Distribution Down…Then Up Distribution
-1.5% Q1 – 86.5 billion -7.1% Q2 – 76.5 billion
+1.4% YTD – 246.8 billion
Source: Inmar Coupon Report 2012
+7.6%79.2 billion
Q3 2012 vs.
Q3 2011
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® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Distribution Declines Across the Board
Non-food Food -2.0% Decline
-3.6% Decline
H1
Q3
YTD
+32.2% Increase
-5.1% Decline
+6.1% Increase
-1.6% Decline
Source: Inmar Coupon Report 2012 11
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Many Major Methods See Distribution Declines
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Share of Redemption Distribution Volume
Change
Free-standing Insert 37.7% +14%
Instant Redeemable 23.1% +31%
Electronic Checkout 7.9% +88%
Shelf Pad 7.2% -35%
Internet 4.7% +3%
Direct Mail 4.5% -20%
Handout 4.2% -39%
In-pack 2.5% -31%
In-ad 1.7% -25%
Electronic Shelf 1.4% -4%
Source: Inmar Coupon Report 2012, Q2 data only
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Price Growth Slowing Lately, but Still Growing
-6
-4
-2
0
2
4
6
8
10
12
14
13 w/e12/04/10
13 w/e03/05/11
13 w/e06/04/11
13 w/e09/03/11
13 w/e12/03/11
13 w/e03/03/12
13 w/e06/02/12
13 w/e09/01/12
Fresh Meat
Dry Grocery
Frozen Foods
Total All Depts
General Merch
Non-Food Grocery
HBA
Deli
Fresh Produce
Pkgd Meat
Dairy
Alcoholic Bevs
Source: Nielsen Scantrack, Total U.S. All Outlets Combined; 13 weeks increments (vs. prior year); UPC-coded
Percent Change in Unit Prices
13
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Price Pressures Easing but Still a Factor
4 1 7
2
20 12
56 66
13 19
0%10%20%30%40%50%60%70%80%90%
100%
9/3/2011 9/1/201213 Weeks Ending
% of Categories with Unit Price Change of:
< -0%0% to 4.9%5% to 9.9%10% to 14.9%15% +
Source: Nielsen Scantrack, Total U.S. – All Outlets Combined; 13 weeks increments (vs. prior year); UPC-coded;
117 major category groupings 14
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Prices Up, Promotion Support Down
-12-10
-8-6-4-202468
% Change Unit Price % Change Any Promo Unit Volume
All Departments 32 periods of price gains; 2.3% increase in latest period
Source: Nielsen Scantrack, Total U.S. All Outlets Combined; 4 week increments (vs. prior year); UPC-coded 15
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The Mother of All Volatility: Gas Prices
$0
$1
$2
$3
$4
$5
Weekly U.S. Regular All Formulations Retail Gasoline Prices (Dollars per Gallon)
$4.11 7/7/08
$3.94 4/2/12
$3.97 5/9/11
$1.61 12/29/08 $1.19
8/20/90 $0.91 2/22/99
Source: U.S. Energy Information Administration *prices include all taxes
$3.85 10/9/12
$3.07 9/5/05
$3.04 8/7/06
$3.22 5/21/07
$1.68 6/19/00
$1.71 5/14/01
$1.06 12/17/01
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® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Offers Just Aren’t as Attractive
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® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Why Else Would Redemption be Down?
• Times are hard • Prices are up • Unemployment is high
-22.9% Q3 2012
vs. Q3 2011
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Q2 Distributed: $1.47/coupon
(-9.3%)
Q3 Distributed: $1.54/coupon
(+0.7%)
Q2 Distributed:
1.53 units/coupon (+2.7%)
Q3 Distributed:
1.63 units/coupon (+9.4%)
Q2 Distributed:
2.1 months (-12.5%)
Q3 Distributed:
1.9 months (-20.8%)
Marketer Tactics Mute Redemption
Average Face Value
Average Purchase
Requirements
Average Redemption
Periods
Source: Inmar Coupon Report 2012, Q2 data only 19
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© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Ugly…and Fewer of Them!
• Q2 distribution down – Q3 redemption driver – Not all of the explanation
• Q3 on the increase • Good Q4 redemption?
-7.1% Q2 2012
vs. Q2 2011
20
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© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Digital is Quickly Becoming Reality
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What is Digital Promotion?
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• Established method • Paper-based redemption • 4.7% of redemption (-29%) • 0.4% of distribution (+3.1%)
Internet Print-at-Home
Coupons
• Emerging method • Digital-based redemption • Very small base and growing • Less than 1% of redemption
Digital Paperless Coupons
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Quick Growth, Real Substance
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28,000 Rooftops
Over 50 Million* Redemptions in 2012
Equals Geometric Growth
Q3—13.6 million redeemed
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© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Significant User Adoption in 2012 (So Far)
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Regi
ster
ed U
sers
+74% O
ffers
Acq
uire
d
+77%
Offe
rs R
edee
med
+97%
Source: Inmar Coupon Report 2012, Jan.-Sept. 2012
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Digital is an Addition Not a Replacement
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Digital FSI
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Shoppers Still Want Coupons
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® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Shoppers are in a Better Mood
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+9 Points
7.8%
Unemployment
Consumer Confidence
… but reality is still stark
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All that Glitters May Not be Golden
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0%2%4%6%8%
10%12%14%16%18%
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Unemployed Underutilized
Source: Seasonally Adjusted U.S. Total Non Farm Employment, Bureau of Labor Statistics
U.S. Department of Labor
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Misery Index Improving, Due to Inflation Drops
29
0123456789
1011121314
misery index = unemployment rate + inflation
Source: U.S. Bureau of Labor Statistics; CPI non-seasonally adjusted, unempl. rate seasonally adjusted
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
CPG Price Increases Due to Continue
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2.5%–3.5%
“Food At Home” Inflation
2012 Forecast
Source: USDA
® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Shopping is About Planning and Price Comparisons
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9%
41%
47%
52%
60%
42%
29%
25%
28%
21%
42%
23%
17%
13%
13%
7%
7%
11%
7%
6%
Purchase from end-aisle displays
Use coupons
Use store circular
Compare unitprices
Use shopping list
On most trips On some On few On none of trips
Source: Nielsen Homescan survey – Feb/March 2012 (n = 55,678)
How frequently do you …
+ 2 pts
+ 2 pts
Versus Sept 2009
+ 4 pts
NC
NC
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The Next Generation is More Primed Than Ever
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Greatest Gen Boomers Gen X Millennials Using shopping list 63 58 57 59 Compare unit prices 46 51 49 51
Use store circular 45 46 42 40 Use coupons 35 36 41 42 Purchase from display 5 6 7 9
Greatest Generation: Prior to 1946; Boomers: 1946-1964, Gen X: 1965-1976, Millennials: 1977-1994
Source: Nielsen Homescan survey – Feb/Mar 2012
% using on most shopping trips when shopping for groceries
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Savings: What Shoppers Want
• 62% save on gas & utilities
• 57% reduce out of home entertainment
• 57% spend less on clothes • 53% reduce grocery spend • 52% reduce take-out meals • 46% use car less
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• 51% save on gas & utilities • 33% reduce grocery spend • 32% reduce take-out • 30% reduce out of home
entertainment • 28% spend less on clothes • 28% use car less
Did This Past Year Will Continue To Do
Source: Nielsen Global Consumer Confidence & Opinion Survey 3Q’12
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Looking Ahead
34
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+5%
Where is All of This Going?
• Distribution flat • Redemption down ~10%
by year’s end 35
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© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Looking Ahead…
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Volatility the new normal
Optimize for performance
Digital continues to grow
Coupons still work
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© 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
Upcoming Webinar
Everything You Ever Wanted to Know about Coupon
Deductions with Dawn Grubbs
November 15, at 11 am (Eastern)
To register: www.inmar.com/webinars
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® © 2012 Inmar, Inc. All Rights Reserved. Not to be reproduced or distributed without written permission from Inmar
For more information:
[email protected] 336.631.2524 www.inmar.com/couponreport @matthewjtilley
Matthew Tilley
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