Thank you for joining, the webinar will start at 11 a.m.

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1 Thank you for joining, the webinar will start at 11 a.m. Please join us in the Promotion Room on LinkedIn for questions asked during today s webinar and continued conversation on this topic.

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3 Devora Rogers Senior Director, Retail Marketing Insights New to Inmar (and North Carolina!) Previously with IPG Media Lab and Shopper Sciences Don t forget to join us in the LinkedIn Promotions Room! 3

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5 Inmar s Portfolio of Services $20.4 billion in transaction value 700+ retailers manufacturers 5

6 Real-Time Relationship Platform 6

7 Don t forget to join us in the LinkedIn Promotions Room! 7

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9 Key Takeaways: Distribution (in billions) DOWN 1.2% Source: 2012 Inmar Coupon Report 9

10 Key Takeaways: Redemption : 3.5B 2012: 3.0B 2 1 DOWN 14.3% 10 Source: 2012 Inmar Coupon Report

11 Distribution by Month Source: 2012 Inmar Coupon Report

12 Redemption by Month Source: 2012 Inmar Coupon Report

13 Distribution vs. Redemption 180 Distribution Redemption Source: 2012 Inmar Coupon Report

14 Internet 0.4% In-ad 2.6% Magazine On Page 1.2% Others 7.0% 2012 Distribution Free-standing Insert 88.8% 14

15 2012 Redemption Electronic Checkout 8.0% Instant Redeemable 18.1% Shelf Pad 6.1% Internet Direct Mail 4.6% 3.7% 15.6% Free-standing Insert 43.9% Other 15

16 Redemption down across the board FOOD 2.0 NON- FOOD 1.0 billion billion 65.8% of Total 34.2% of Total 16 Source: 2012 Inmar Coupon Report

17 The redemption roller coaster (in billions) Source: Inmar Coupon Reports

18 So what s driving the decline? 18

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20 Paid Sunday newspaper subscription impact 9.0 Coupon Redemptions vs. Paid Circ 70.0 Billions of Redemptions Millions in Circulation Tot. Coupon Red. Paid Sunday News Circ 20 Source: Editor and Publisher International Yearbook

21 January decline wipes out 2012 gains Consumer Confidence Index January 2002 through January 2013 Previous Restated The Conference Board - Nine census regions, 5,000 US households; 1985 = 100; conducted by Nielsen 21

22 CPG prices on the rise 5 4 Percent Change in Unit Prices periods of price gains; 4.9% increase in latest period Source: Nielsen Scantrack, (U.S. FDM w/ Walmart) 4 week increments (vs. prior year); UPC-coded 22

23 Consumers shifting spend or buying less Alcoholic Bevs Fresh Produce HBA Deli Packaged Meat Non-Food Grocery Dairy Fresh Meat Dry Grocery General Merch Frozen Foods Total All Depts Unit Volume % change vs. year ago Source: Nielsen Scantrack, Total U.S. All Outlets Combined, 52 weeks ending 12/22/2012 (vs. prior year), UPC-coded 23

24 Dec Misery index improving but not for younger and less educated Ages 20 to 24 years Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec Dec Age 55 and over Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec High School graduates, no college 18 Bachelor's degree and higher Dec Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec Dec Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec misery index = unemployment rate + inflation Source: Nielsen, 2012 U.S. Retail Trends U.S. Bureau of Labor Statistics; CPI non-seasonally adjusted, unempl. rate seasonally adjusted 24

25 Shoppers relying on coupons to help in down economy 54% of shoppers say they increased their coupon usage because their financial situation changed 25 Source: 2013 Inmar Shopper Study

26 The payroll tax is back Will consumers feel the bite? Average $400-$2,200 a year 26 Source: Congressional Budget Office

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28 Offer Attractiveness 28

29 Marketers tightening budgets after hot Q1-3% Q2 +4% Q3 +16% Q4 +5% 29 Source: 2011 Inmar Coupon Trends

30 Tactics Having Little Impact on Redemption Average Face Value Distributed Distributed: $1.57/coupon (-1.3%) Redeemed: $1.14/coupon (+1.8%) Average Purchase Requirements Distributed Distributed: 1.49 units/coupon Redeemed: 1.61 units Average Redemption Periods Distributed Distributed: 2.4 months (-4.0%) Redeemed: 5.4 months (-7.0%) 30

31 Redemption period by method type 2012 Coupon Fact Book Average Redemption Period Distributed by Method (in months) Method Beginnings Magazine n/a Bounceback Color Run-of-press Consumer Relations Direct Home Delivery Direct Mail Direct Mail Co-op Direct Mail with Sample Electronic Checkout Electronic Kiosk Electronic On-cart n/a n/a 1.0 Electronic Shelf Free-standing Insert Handout Handout Co-op Handout In-store with Sample Handout Off-store Location Handout Off-store Location Co-op Handout Off-store Location with Sample Hospital Sample In-ad In-pack In-pack Cross Ruff Instant Redeemable Instant Redeemable Cross Ruff Internet Magazine On-page Magazine Pop-up Military Handout Military Magazine Military Shelf Pad Newspaper Co-op n/a Newspaper Run-of-press On-pack On-pack Cross Ruff Prenatal 24.0 n/a 20.9 n/a n/a Shelf Box Shelf Pad Sunday Comics n/a n/a n/a 3.0 n/a Sunday Supplement My coupons often expire before I have the chance to use them. 31 Source: 2013 Inmar Shopper Study

32 New product trial dampening redemption Manufacturers Promoting New Products via FSI in 2012 (+9.9% over 2011) New Product Event Dates in 2012 (+23.2% over 2011) Categories Featuring New Product Events in 2012 (+13.4% over 2011) I can t find coupons for the products I want to buy 52.83% 32 Source: Kantar Media (Marx)

33 Shopper Behavior 33

34 Changing shopper sentiment: From effort to entitlement If I put in the effort, I can get deals on the brands I buy. If I shop a store a lot, I shouldn t have to work for deals I deserve. 34

35 Shopper attitudes to coupons 65% Don t think they should have to work for deals. 80% Using coupons makes me feel smarter. 66% I would use coupons more if they were more available online. 36% I am not sure where to get coupons for the products that I want to buy. 37% I wish all coupons were digital. 35 Source: 2013 Inmar Shopper Study

36 Why shoppers use coupons Compared to 2011, shoppers reported coupon usage in 2012: INCREASED 54% STAYED THE SAME 41% DECREASED 4% 36 Source: 2013 Inmar Shopper Study

37 Shoppers want easy and personalized offers 65% 65% 63% I want coupons loaded to my store loyalty card for products that I normally buy. I want stores to me with coupons for products that I normally buy. I want all available store coupons to be loaded onto my store loyalty card. 37 Source: 2013 Inmar Shopper Study

38 Rise of the Mansumer #mansumer Participation in holiday meal planning 6% 59% 35% Not involved Share All Decisions 86% 44% 40% Not involved Share All Decisions 44% 18% 38% Sources: 2012 Inmar Holiday Study, KSDK, Men s Health, Spike Network s State of Men study 38

39 Digital Fragmentation 39

40 One word to describe the digital offer landscape Artist credit: Morten Fangok Olesen 40

41 1 Text Message 7 Ways to Receive a Digital Offer 2 3 Brand, Retailer or Publisher Website QR Code Publisher Code Facebook Mobile App How can we help you? 41

42 How digitally discovered coupons are redeemed Redeemed like paper Paperlessly redeemed Retailer Loyalty Program (i.e. ewallet/ Direct-to-Card / Save-to-Card) Text Website Unique Identifier (10-digit mobile) Loyalty Aggregator (AOL shortcuts, SavingStar, etc.) Social QR (et al) Apps Manifests as a paper coupon Redeems as a paper coupon Settles as a paper coupon Closed Retailer Program (Target, Walgreens, Starbucks, etc.) Never manifests as paper Redemption recorded separately 42

43 So many choices or too many choices? Source: MediaPost & Company websites

44 In 2013, the number of retailer storefronts which accept paperless coupons is expected to grow 50% or more depending on channel. 44

45 Clips: 250 Million Digital coupons redeemed: 27.5 million 45 Source: 2012 Inmar Coupon Report

46 Average redemption rate: 11% Average face value: $ Source: 2012 Inmar Coupon Report

47 Digital paperless coupon distribution is on the rise FSI CAGR - 3% Billions FSI Print at home Digital Paperless PAH CAGR 17% Digital Paperless CAGR 898% Source: 2012 Inmar Coupon Report

48 Conclusion section slide 48

49 Slight to modest Conclusion section slide increase in redemption volume over

50 Thank you. Questions? Don t forget to join us in the LinkedIn Promotions Room! 50

51 Devora