ST. PETERSBURG, Fla. — Catalina Marketing here, whose color coupon printers are now in about 9,000 supermarkets, has determined that consumers redeem the color coupons at a 30% higher rate than that for Catalina's traditional black-and-white coupons.
This year Catalina began replacing its familiar black-and-white coupon printers at the checkouts of 17,000 stores nationwide with new four-color inkjet printers made by Epson.
When the rollout is completed in mid-2007, about 14,000 of those stores will have the color printer at their checkouts, with the remainder keeping the black-and-white model due to technical limitations at the stores. Catalina is investing $100 million in the color printer rollout.
Catalina's black-and-white coupons generate redemption rates averaging about 6.3%, according to Dick Buell, chief executive officer. In research conducted over a four-month period this year, Catalina compared the redemption rates of more than 100 coupon offers printed in both black-and-white and color, finding the latter rates to be 30% higher on average.
The findings and methodology were validated by an independent third party, VSI Targeting, Winston-Salem, N.C., a sister company of coupon processor Carolina Manufacturer Services.
Catalina coupons have a far higher redemption rate than that of other common sources of coupons, including freestanding inserts (0.68%), direct mail (1.21%) and the Internet (0.96%), according to the CMS Trends 2006 report published by Carolina Manufacturer Services.
At Meijer, Grand Rapids, Mich., a two-month rollout of the color printers to its 178 stores was completed the first week of November, according to Michael Ross, Meijer's director of marketing strategy. The printers are generating coupons for gas discounts at 150 Meijer stores for the first time.
Consumer response to the color coupons has been favorable, Ross said. “We've created a new level of energy with the color printouts.” Meijer has also found that the color coupons' redemption rates average 30% higher than those of the black-and-white coupons. Meijer's black-and-white rates — around 8.6% — are higher than Catalina's national average.
Catalina coupons are typically targeted to a shopper's current purchases or shopping history, which can be gleaned from a loyalty card database. Meijer doesn't offer a loyalty program, but is able to gather individual shoppers' purchasing data via its branded credit cards and community rewards program, among other methods.
Ross regards the color coupons as an advertising medium as well as a vehicle for purchase incentives. “The color graphics grab your attention,” he said. “You can portray a brand image now.” As a result, some of the communications can be purely informational. “We can say to organic shoppers, ‘Did you know we now carry organic bananas?’” he said.
Buell noted that Catalina is involved in tests with CPG manufacturers to evaluate the coupons' effectiveness as an advertising medium. “They can show packaging, recipes, how to use the product,” he said.
Ross said that the color capability of the new printers is attracting new vendors into the Catalina program in categories like fresh, general merchandise and HBC.
In addition to providing a conduit for CPG product offers, Meijer employs the coupons to support introductions of new private-label products, as well as to build sales of entire categories or departments such as general merchandise, Ross said.
Ross observed other advantages of the color coupons: they are printed as individual coupons, rather than as part of an uncut roll; and they include security enhancements such as special watermarks and small perforations cut into the paper.
In addition, he said, the printer prints faster than even the most recent model of the black-and-white printer, and the new system monitors paper and ink usage and automatically reorders supplies.
About 300 manufacturers use Catalina's network. Retailers continue to incur no cost for the program.
