VENDORS GROWING WARY, RETAILERS CANNY ABOUT COUPONING

AMITY K. MOORE

While some manufacturers are now questioning the effectiveness of coupons, retailers are more concerned about the best way to distribute them.

In the Phoenix market, consumers clip so many coupons that supermarket operators are pushed to offer double -- and sometimes triple -- coupons to drive store traffic, according to Becca Anderson, public relations director at Bashas' Markets, Chandler, Ariz.

"I don't think anybody bothers to evaluate the efficacy of coupons in the Phoenix market," she added. "They're a reality that we have to deal with -- most often by doubling them."

At Giant Food, Landover, Md., distributing coupons printed out at front-end registers is considered the most effective method, according to Dave Herriman, the chain's senior vice president of grocery, pharmacy and bakery operations. The chain's couponing system was developed by Catalina Marketing Co., St. Petersburg, Fla.

Of the retailers SN polled, most agreed that consumers are more likely to redeem coupons if they receive them while shopping -- at checkout, through dispensers at shelf level or through frequent-shopper programs -- rather than getting them in the mail or out of the newspapers.

Herriman commented that freestanding inserts are a wasteful expense to manufacturers. "The numbers just don't work out that it would be an efficacious way of marketing," he said.

NCH Promotional Services' 31st annual Trends Analysis, released early this year, revealed that of the 268.5 billion coupons distributed by packaged-goods manufacturers in 1996, only 5.3 billion were redeemed. NCH is a NuWorld company based in Lincolnshire, Ill.

In addition, the average face value of coupons redeemed by consumers did not keep up with inflation, according to NCH, increasing 1.5% to 69 cents, while the Consumer Price Index grew at a rate of 3.3%.

NCH said this discrepancy is due to the fact that the average face value offered on coupons distributed by vendors was 67 cents, a 2.3% decline, in 1996. Also, the average duration of a coupon offer has been shortened to three months, a 9.1% decrease from 1995.

Seaway Food Town, Maumee, Ohio, still uses traditional and electronic coupons, it relies on its frequent-shopper card program to give its customers the best deal.

"[Shoppers] are still using coupons, but our frequent-shopper program eliminates the necessity for clipping coupons," said Pat Nowak, the chain's director of public relations and consumer affairs.

In a similar vein, Hastings, Mich.-based G&R Felpausch Co. installed a kiosk in one of its stores two weeks ago, according to Roger Jones, vice president of marketing and public relations for the 19-unit chain.

"The consumers swipe their Felpausch frequent-shopper cards and it kicks out their coupons, so they have them right in their hands as they're shopping," he said.

Coupons may spur impulse purchases but, according to a 1996 Consumer Behavior Study, also commissioned by NCH, consumers use coupons to plan their shopping lists 73% of the time.

Jones disagrees, and the trend in electronic coupon dispensing may support him. These handouts, part of the push toward account-specific marketing, were up 17.2% in 1996, according to other data from NCH.

Coupon dispensers found at shelf-level near the products being promoted are the choice at some of the retail stores in central Pennsylvania run by Oklahoma City-based Fleming Cos., according to Chris Blankenship, grocery director for the Pennsylvania division's retail stores.

"It's the most effective because it's impulse," he added. "The consumer doesn't have to cut it out. The redemption is much greater on any of the items that we do in-store."

Most retailers could not comment on which categories showed the most coupon redemption, but Felpausch's Jones said, "There have been more coupons out there available in the FSIs in the cereal category, so that has been a big category for coupons, as well as detergent."

Fleming's Blankenship added that cereal manufacturers have cut back on their in-store couponing because they recently lowered their retail prices. "Kellogg, in general, has cut back on couponing both ways -- FSIs and in ads," he said.

Coupons 'R Us

Shoppers redeemed coupons in the Mid-Atlantic states -- Pennsylvania, New Jersey and New York -- more than anywhere else in the country last year, according to results from the 1996 Consumer Behavior Study, produced by NCH Promotional Services, a NuWorld company, Lincolnshire, Ill.