REDEEMING VALUES 1994-08-22 (1)

Coupon Distribution: FSIs Deliver

otential of targeted in-store coupon distribution vehicles, such as electronic POS and shelf-based systems, but freestanding inserts remain the overwhelming choice of manufacturers. Rather than declining, the percentage of total coupons distrubuted via FSIs increased last year to 88%. FSI rates held constant at 88% during the first six months of 1994.

Percentage of Total Coupons Distributed

1991 1992 1993

Freestanding

Inserts 84% 86% 88%

Direct Mail 4% 3% 2%

Handouts 2% 2% 2%

Elec. POS &

Shelf-Based

Systems 1%

Coupon Redemption: New Systems Gaining

Freestanding inserts remain the dominant form of coupon distribution, but their redemption rates are falling. In 1993 FSI redemption rates fell to 2.1%, and during the first six months of 1994 FSI rates dropped to 2.0%. In comparison, in-store electronic POS and shelf-based systems are succeeding in generating stronger coupon redemption rates.

Redemption Rates of Selected Couponing Systems

1991 1992 1993

Freestanding

Inserts 2.3% 2.3% 2.1%

Handouts 4.0% 4.1% 4.2%

Shelf-based

Systems 10.1% 13.0%

Elec. POS 7.9% 7.9% 8.5%

Direct Mail 6.8% 5.2% 4.8%

No Let Up

Despite efforts at selective targeting, the total number of coupons continues to grow. During the first six months of 1994, 164 billion were distributed.

Total Coupon Distribution

billions of coupons dispensed

1991 292

1992 322

1993 323