Nineteen ninety-five is expected to be a stable year for coupon distribution and redemption, with some carryover of positive momentum from the second half of 1994, said coupon industry officials.
"We think that coupon distribution will stabilize in 1995, and it's at a pretty high level," said Joan Johnson, marketing manager, at Winston-Salem, N.C.-based CMS, the nation's largest manufacturer coupon agent.
"In 1994 we had a slight bump up in distribution when everybody was predicting that it was going to plummet. We expect that redemptions will stabilize in 1995, and may in fact see a slight increase," Johnson said.
"The increased distribution we saw in the fourth quarter should positively impact redemptions in the early months of 1995," said Jane Perrin, senior vice president at NCH Promotional Services, a coupon processor based in Lincolnshire, Ill. "We have already seen signs of strong distribution in the new year, and we project a positive impact on coupon redemption."
Separate coupon usage surveys conducted by CMS and NCH Promotional Services found that coupon distribution increased in 1994, while overall redemption rates continued to slide.
Figures released last month by CMS found that 1994 coupon distribution increased slightly to 327 billion coupons, but redemption fell 0.8 billion to 6.9 billion coupons, largely because of restrictions placed on consumer incentives.
CMS said distribution was aided because some manufacturers increased their use of coupons. Distribution was also helped by an expansion of the methods by which coupons are distributed. Since 1989, the number of methods that CMS tracks in its study has risen 51% and CMS added there are more coupon vendors for traditional methods.
CMS said the decline in coupon redemption could be pegged largely on the decline of expiration dates. Coupons with 0- to 2-month expiration periods rose three percentage points from 1993 to 37%. The overall average expiration period was 3.7 months, nearly half the amount of time it was six years ago.
"I feel that expiration periods have gotten as short as they are going to get and will stay where they are at now if not increase," Johnson commented.
NCH's study found 1994 redemption down from 1993 levels, although it picked up in the second half of the year. "At mid-year, coupon redemption was off by 11%. But helped by the increased distribution of coupons in the second half, the drop in coupon redemption was tempered," Perrin explained.
"Some of the manufacturers that switched to an everyday low pricing strategy have been introducing coupons back into their merchandising mix," she added.
Of expiration dates, Perrin said, "I think people are sticking around the three-month level, and we will continue to see that. Manufacturers want to be able to target the redemption to a certain time period and specific promotion. That was not true in the mid-80s when they might have a 12-month expiration on it."
Grocery coupon distribution dropped slightly to 220 billion coupons in 1994, down from 221 billion in 1993, Perrin said. Meanwhile, health and beauty care coupons increased to 89.5 billion from 77.3 billion in 1993.
The top-10 coupon distribution categories in 1994 were cereals and breakfast foods; medications, remedies and health aids; household cleaners; sanitary protection; oral hygiene; pet food; hair care; cough and cold remedies; detergents, and bread and baked goods.
Johnson said CMS found the number of coupons requiring multiple purchases increased in 1994 to 17% from 14%, which tended to discourage some shoppers. Redemption was also affected by an increase in the number of coupons per freestanding insert page to 1.9. CMS research shows that redemption for FSIs with more than one coupon per page is usually lower per coupon than for single-coupon FSIs.