SUSAN JONES Senior Director, Shopper & Promotion Analytics susan.jones@inmar.com 2 2
Promotion Landscape
Key Finding: Coupon Distribution (in billions) 321 307-4.3% 2015 2016 Source: 2017 Inmar Coupon Trends 4
Key Finding: Coupon Distribution (in billions) 313 327 321 321 307 2012 2013 2014 2015 2016 Source: 2017 Inmar Coupon Trends 55
Key Finding: Coupon Redemption (in billions) 2.3 2.2-4.1% 2015 2016 Source: 2017 Inmar Coupon Trends 66
Key Finding: Coupon Redemption (in billions) 2.9 2.8 2.7 2.3 2.2-3.3% -4.3% -13.6% -4.1% 2012 2013 2014 2015 2016 Source: 2017 Inmar Coupon Trends 7
Coupons Drive Purchase Behavior Among the 49% of shoppers that used coupons, those promotions drove shoppers to Make a higher volume purchase Make an accelerated purchase Purchase a brand they would not otherwise Purchase a different product within a brand Switch back to a brand 14% 12% 29% 27% 31% Source: Inmar 2017 Shopper Behavior Study 10 8
Fewer Shoppers Looking for Coupons 89% of shoppers used a coupon in the past three months compared to 92% in 2015 In the past three months, how often have you used coupons when shopping: 16% All of the Time 26% Usually 24% About Half the Time 23% Rarely 11% Never Source: Inmar 2017 Shopper Behavior Study 11 9
Eating at Home vs. Eating Away from Home Supermarket Restaurant Prepared Foods Prepared Pick-Up Meal Kits Grocerant Restaurant Grab and Go Pre-Ordered Online or In-Store (Kiosk prior to shopping) In-Store Third-Party Hybrid Ordered Onsite, Pre-Ordered Online or In-Store (Kiosk prior to shopping) Food Service Revenues in Supermarkets Expected to Reach $30MM in 2017 The Business Insider cites research from NPD Group s recent report A Generational Study: The Evolution of Eating, which finds fresh, restaurant-quality food, chef-driven menus and instore experiences are reasons for millennials to visit and spend at grocerants. Source: National Restaurant Association//Technomic Source: Inmar Willard Bishop Analytics Key Trends Impacting Grocery Retailing 12 10
Digging Into The Data
2016 Coupon Distribution FREE-STANDING INSERT: 90.1% 1.5% 1.1% 0.9% 0.8% 0.8% 0.6% 0.6% 0.5% 0.5% 0.4% 0.4% 1.7% Dual Electronic and Paper: DEP Electronic Checkout: EC In-ad: IA Magazine Pop-up: MPU Handout: HO Instant Redeemable: IR Direct Mail: DM Magazine On-page: MOP Sunday Supplement: SS Instant Redeemable Cross Ruff: IRC Load2Card: EDO Other Source: 2017 Inmar Coupon Trends 14 12
2016 Coupon Redemption FREE- STANDING INSERT 34.6% 17.9% 8.3% 5.8% 4.9% 4.3% 4.1% 3.6% 3.4% 3.0% 10.1% Instant Redeemable: IR Electronic Checkout: EC Instant Redeemable Cross Ruff: IRC Dual Electronic and Paper: DEP Direct Mail: DM Shelf Pad: SP Print-At-Home: NET Handout: HO Load2Card: EDO Other Source: 2017 Inmar Coupon Trends 1513
Shopper Attitudes: Coupons How often did you use the following types of coupons to purchase groceries? 2016 2017 Loaded onto my retail store loyalty card/associated with my account number 37% 42% Inserts from the Sunday newspaper 43% 40% Found in the store circular 42% 39% Barriers to Coupon Use 2016 2017 My coupons often expire before I have the chance to use them 62% 63% I can t find coupons for the products that I want to buy 62% 63% It takes too much time to find coupons 45% 48% Source: Inmar 2017 Shopper Behavior Study 16 14
Promotion Design Impacts Redemption 2016 2015 Average Face Value Distributed $1.64 $1.74 (DOWN 5.6%) Average Purchase Requirement Distributed 1.40 1.43 (DOWN 2.1%) Average Redemption Period Distributed 2.0 2.0 (UP 1.3%) Source: 2017 Inmar Coupon Trends 17 15
Method Tactics Vary Average Face Value Distributed $4.00 $3.00 $2.00 $1.00 $0.00 $1.65 Free-Standing Insert (FSI) $1.29 $1.48 $1.38 Instant Redeemable (IR) Electronic Checkout (EC) Shelf Pad (SP) $2.97 Print-At-Home (PAH) $1.31 Load2Card (L2C) $2.01 Handout (HO) Average Purchase Requirement Distributed (units) Average Redemption Period Distributed (months) 2.50 2.00 1.50 1.00 0.50 0.00 1.38 1.34 2.29 1.66 1.41 1.52 1.23 FSI IR EC SP PAH L2C HO 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1.7 6.9 4.7 5.9 FSI IR EC SP PAH L2C HO 4.6 2.3 4.5 Source: 2017 Inmar Coupon Trends 116 16
Consumer Response Varies Significantly by Method 18.16% Average Redemption Rate: 2016 9.03% 10.80% 6.31% 6.20% 3.31% 0.33% Free- FSI Instant IR Electronic EC Shelf SP Pad Print-At-Home NET Load2Card EDO Handout HO Standing Redeemable Checkout Insert Source: 2017 Inmar Coupon Trends 19 17
Food/Non-Food Trends
Distribution: Food & Non-Food Offers 34.1 2015 2016 35.6 65.9 64.4 Non-Food Food Non-Food Food Source: 2017 Inmar Coupon Trends 21 19
Redemption: Food & Non-Food Offers 37.5 37 2015 2016 62.5 63 Non-Food Food Non-Food Food Source: 2017 Inmar Coupon Trends 22 20
Trends Similar Between Food & Non-Food Offers Average Face Value Distributed Average Purchase Requirement Distributed Average Redemption Period Distributed Food $1.11-1.4% 1.45 units -3.3% 2.2 months -2.6% Non-Food $1.94-5.9% 1.37 units -1.6% 1.8 months +3.4% Source: 2017 Inmar Coupon Trends 23 21
Topic Spotlight: FSI and L2C Trends
The Shifting Promotion Mix 9.5% 0.4% 3.0% % Distributed % Redeemed 34.6% 62.4% 90.1% Load2Card: EDO Free-Standing Insert: FSI All Other 29 23
Topic Spotlight: Free-Standing Inserts Distribution and Redemption Trends % Distributed % Redeemed 89.2% 89.2% 90.1% 39.4% 38.4% 34.6% 2014 2015 2016 2014 2015 2016 25 24
Topic Spotlight: Free-Standing Inserts Tactic Trends by Year Redemption Rate 0.42% 0.38% 0.33% 2014 2015 2016 Face Values $1.73 $1.74 $1.65 $1.50 $1.51 $1.45 2014 2015 2016 Avg Face Value Avg FV Dist Per item Redemption Period (in months) Purchase Requirement (in units) 1.7 1.7 1.7 1.42 1.42 1.38 2014 2015 2016 2014 2015 2016 26 25
Topic Spotlight: Load2Card Distribution & Redemption Trends % Distributed % Redeemed 0.4% 3.0% 0.3% 0.3% 2.5% 1.8% 2014 2015 2016 2014 2015 2016 30 26
Topic Spotlight: Load2CardTactic Trends by Year Redemption Rate 5.43% 5.16% 6.20% $1.55 $1.22 Face Values $1.30 $1.05 $1.31 $1.08 2014 2015 2016 2014 2015 2016 Face Value Face Value per Unit Redemption Period (in months) 2.8 2.3 2.3 Purchase Requirement (in units) 1.47 1.45 1.52 2014 2015 2016 2014 2015 2016 31 27
Takeaways
The Emerging Shift 1 Redemption Decline Slowed 2 Digital at A Record High 3 Shoppers Want Convenience and Savings 4 Strategy Is Key 34
www.inmar-insights.com www.inmar-insights.com On demand reporting, research & education for CPG brands and retailers Industry Trends Shopper Research Education Reports focused on key trends data and analysis from the promotion industry Studies and findings analyzing shopper behavior and the path to purchase Fundamental information about the promotion industry and best practices 35 30
Thank you! Questions? Susan Jones susan.jones@inmar.com (336) 631-2568 www.inmar.com www.linkedin.com/company/inmar @InmarInc 31 36
Methodology Percent change compares activity throughout the full year of 2016 with activity from the full year of 2015 Distribution and redemption data consolidated from the Inmar coupon database Industry distribution and redemption statistics extrapolated using Inmar and Kantar Media data Analysis conducted to develop key insights Data cross-checked with major coupon distributors and thirdparty vendors Shopper Behavior Study collected in January 2017 representing shopping behavior for the last three months of 2016 (n=1000) 32
Tips for Understanding Trends Data Manufacturer Offers Promotions funded by manufacturers and distributed to consumers Store Offers Promotions funded by retailers and distributed to consumers Trade Promotions Loyalty Programs Discovery Context WHICH SHOULD NOT BE CONFUSED WITH Distribution Method Promotions funded by manufacturers and distributed by retailers Programs that link a consumer to a unique ID and enable the retailer to provide savings to the consumer through Load-to-Card promotions and other savings vehicles The way in which a consumer discovers a promotion The media vehicle a manufacturer uses to distribute a promotion to consumers 33