TODAY'S SHOPPER

Carol Angrisani

Consumers are increasingly value-conscious and receptive to manufacturer promotions that help their family budget, a new Brand Marketing/Experian study says.

According to the 2002 Survey of Promotional Practices, 86% of consumers agree strongly or somewhat that they are helping their family budget by using coupons, and 47% agree that they purchased more store brands this year than others.

Among other top-line results:

59% of consumers are buying discounted items more often this year;

33% are relying on coupons more;

50% are more interested in free samples;

Only one-third say their shopping behavior has not changed this year. Bethany Stanley, senior industry marketing manager, Experian, said changes in shopping habits could be economic not only on the part of consumers, but also retailers and manufacturers, who are putting more items on special.

"Sixty-six percent of consumers stated that their shopping behavior has changed this year. It is most likely a function of their economic condition, the nesting phenomenon since 9/11 and opportunity,"

Stanley said. Sixty-five percent of respondents agree that they look through coupons when planning their shopping trips, and 75% agree that they often purchase a brand for which they have a coupon. Also, 78% agree that they become aware of new/improved products through samples or coupons.

Stanley said the results verify that consumers are aware of and reacting to the promotions they are receiving.

"Consumers like their promotions to be relevant to them and targeted," she said. "They go as far as helping marketers out by passing on a sample to family and friends, signing up on manufacturer Web sites for product coupons and samples."

Indeed, consumers are looking for help when shopping for consumer packaged goods products, said Sara Owens, president, Promo Pros, St. Louis, a promotion consulting firm.

"It's been a tough year economically, so consumers are stretching their dollars and more are willing to take the time to redeem a coupon and use a sample," Owens said. "Incentives are relevant to their lives. For some, they can't afford a product without them."

Conducted online, the study polled 104 primary household shoppers. The data was weighted to represent the U.S. population in terms of age, gender, income and state. The majority of respondents were female (73%) and reported weekly expenditures of $50 or more on grocery/household/health and beauty care products (66%). More than one-quarter (34%) reported expenditures over $100 a week.

Sampling

Results showed that product samples generate consumer trial and conversion, with 93% of respondents agreeing that they would consider switching brands if they like the free sample, and two-thirds agreeing that they often buy a product after receiving a sample. "This is a great validation of the old saying, 'If you have a great product, let the consumers try it and the product will sell itself,"' Stanley of Experian said.

When asked about samples, 71% indicated receiving them in the mail; 72% said this is how they prefer to get samples. "In the mail" also ranked significantly higher in recalled source of receipt.

Consumers were also asked about their recall of other sampling distribution methods. The results:

In-/on-pack: 42% say this is their current source of getting samples, while 46% say this is the preferred source;

Handed out in-store: 44%, current source; 54%, preferred source;

Over the Internet (via a form): 36%, current; 31%, preferred;

With newspaper: 34%, current; 44%, preferred;

With magazine: 23%, current; 17%, preferred;

Doorknob: 18%, current; 22%, preferred. Another 2% reported receiving samples in nontraditional ways, including when they obtained a marriage license and with the purchase of a washing machine.

Surprisingly, said Stanley, 8% of respondents said they didn't get any product samples in the past year.

Consumers were asked which of a series of statements applied to them and their households. A strong 32% said they've tried every sample received, while 51% said they've tried most (about 3/4) samples. Just 1% said they don't try samples.

One-fourth (24%) said they frequently pass on samples to family/friends for products that their household doesn't use. And 36% said they often purchase a product after trying a sample.

The older the consumer, the more likely he/she is to try a sample, according to the study, which showed that 58% of respondents over the age of 65 claimed to try every sample they receive.

Coupons

Over half (52%) of respondents said they use one to two grocery, household or HBC coupons in a typical week

Over two-thirds of consumers said they receive coupons from the Sunday paper (69%); in the mail (68%); and inside/on the package (68%). These are the same distribution methods that consumers say they prefer. All three methods also topped the list in the 2001 Survey of Promotional Practices.

Owens of Promo Pros said the results show that FSIs provide marketers with flexibility in terms of customization.

"I'm a huge believer in the power of FSIs," said Owens. "They can be targeted. You can choose the right circulation and customize by market, offering lower values in areas where a brand is strong, and higher values in areas where it's not."

Charles Brown, vice president, marketing, NCH Marketing Services, Lincolnshire, Ill., a coupon clearing and processing agent, predicts continued growth of the FSI.

"It's a great way to reach a large number of people in one day," said Brown, who also serves as co-chair of the PMA Coupon Council. "That's what a promotion event is designed to do."

Lynn Liddle, vice president of communications for Valassis Communications, Livonia, Mich., a marketing services firm, agreed. While some question the targeting potential of the FSI, Liddle said there are many tools marketers can use to target FSIs. One is what Valassis calls the Consumer Navigator, which gives marketers an idea of how coupon-sensitive people are in different markets. This lets markets decide which coupon value will be most efficient to use in specific areas.

"It's amazing what you can do with budget restrictions or attempts to increase your redemption by changing your coupon value place to place," said Liddle, who also serves as co-chair of the PMA Coupon Council. "We can target to 120,000 different newspaper zones."

Among other couponing results:

More consumers say they prefer to receive coupons via manufacturer/retailer e-newsletter than two more established distribution methods, street handouts and at-the-store kiosks.

Less than 3% said they haven't obtained grocery, household or HBC in the last year.

CPG manufacturers distributed a total of 239 billion coupons in 2001, a 3.6% decline. Of this, 4 billion were redeemed, an 11% decrease. To boost redemption, the coupon industry is appealing directly to consumers to promote the benefits of coupons. Last month marked the fifth annual National Coupon Month, an annual promotion during which consumers are reminded that they can save as much as 10%-20% on grocery bills by spending as little as 20 minutes per week clipping coupons. Coupons also can be used to show kids the value of the dollar. A teacher's lesson plan and parent's educational guides are available at www.couponmonth.com.

"We want to remind consumers about the value of coupons," Brown said.

Internet

Since the survey was fielded online, all of the respondents are Internet users. A majority (63%) said they have been online for the last three to seven years; 30%, three to four years; and 33%, five to seven years. Fifteen percent said they have used the Internet for more than seven years.

When asked which type of online activities they've participated in, the majority (51%) said they obtain product recipes. Two other popular online activities include signing up on a manufacturer's Web site for a product sample (43%); and signing up on a manufacturer's Web site for a coupon (38%).

Also, 31% joined an Internet club or Web site that offers free samples, coupons or other offers; and 24% asked for advice on product use.

About 25 to 30 manufacturers -- including Georgia Pacific, Unilever, Dreyer's, Gorton's, L'Oreal, Sargento and Heinz -- have licensed technology from CoolSavings to offer coupons and/or samples via their Web sites, said Matt Moog, president and chief executive officer, CoolSavings. CoolSavings, Chicago, is an online direct marketing company.

When asked to comment on the interest in online recipes, Moog noted that about 3.5 million consumers have opted-in to CoolSavings' recipe e-newsletter, which has been sponsored by manufacturers including Land O'Lakes and Hershey. "Consumers have an insatiable appetite for new recipes and meal ideas," Moog said.

Though security concerns remain, Internet coupons are gaining more acceptance among manufacturers. CoolSavings, for instance, has printed more than 12 million Internet coupons.

While consumers are receptive to Internet couponing and sampling, they're less responsive to e-newsletters. Just 23% said they subscribe to a consumer packaged goods manufacturer's e-newsletter.

The reason for this could be that low Internet users don't know that CPG e-newsletters exist, while heavy users may not want any more e-mail, said Spencer Hapoienu, president and co-founder, Insight Out of Chaos, New York, a database marketing/customer relationship management firm.

"Heavy Internet users have signed up for so much stuff already that CPG newsletters may not seem as important to them," Hapoienu said.

Owens of Promo Pros agreed, saying Internet users want to limit the e-mail they receive. To do so, many will only op-in to e-newsletters that provide customized information that's truly relevant to them, she said.

"I, personally, respond to those with a headline that's compelling to me," said Owens. "If the headline doesn't hook me, it's unlikely that I'll read what's inside."

Time for a Promotion

While most consumers think the recession is over and want to go back to their regular patterns of buying, they're still taking advantage of discounts, said Claire Rosenzweig, president, Promotion Marketing Association, New York, the trade association that represents the promotion marketing industry

"Certainly, consumers are feeling the crunch," she said. "This is evident in sales, which are up at Wal-Mart but down at traditional stores."

Consumers were asked which of a list of promotions their household had received either for free or with a grocery/household and/or HBC purchase in the past year. At least two-thirds of respondents reported receiving coupons (70%), bonus packs (68%), product samples (66%) or on-pack price discounts (65%). These results compare to the 2001 Survey of Promotional Practices.

Consumer recall for two types of promotions -- product samples and attached gift -- was notably higher for women than men: 73% vs 50%, and 55% vs. 30%, respectively.

Ethnic/Natural

Despite the growth of ethnic and natural/organic foods, just 15% of respondents said they're purchasing more ethnic foods, while 21% said they're buying more natural/organic items. Another 21% said they're purchasing more in "bulk" and at club/co-op stores.

Behind the Results

Welcome to the first of a two-part report on promotional practices within the consumer packaged goods industry. The objective of the study is to determine benchmarks that will be useful references for the entire industry.

The survey is the result of a partnership between Brand Marketing and Experian, a global information solution company that has U.S. headquarters in Costa Mesa, Calif. Experian headed the consumer questionnaire formulation and analysis that examined how consumers use and perceive different promotional methods.

The findings presented over the next few pages reveal consumer attitudes about couponing, sampling, Internet marketing and other promotional practices. They are the result of an online survey conducted in August of this year. Brand Marketing commissioned InsightExpress, Stamford, Conn., an online market research firm, to conduct the survey. There were 104 primary household shopper respondents.

In next month's issue, Brand Marketing will team with Experian again to publish the second part of the report: where manufacturers say they are putting their dollars. Results will also be based on an online survey.