Full presentation of Inmar\'s 2009 Trends Review

1. 2009 Coupon Trends Review
January 21, 2010

2. Who am I?
Matthew Tilley is responsible for marketing Inmar as a premier promotions services firm,
Your marketing promotions as a vital tool, and helping Inmar's clients market themselves through
better promotions.
Presenter
Matthew and his team supply the brains and production power behind
PromotionsInfoNow.com and the annual Coupon Report, both oft-quoted sources for CPG
coupon statistics. Matthew's insights are often included in a variety trade and consumer
media including: The Wall Street Journal, La Opinion, Progressive Grocer Chicago Tribune
Journal Opinion Grocer, Tribune,
PROMO, Baltimore Sun, FOX Business News, Associated Press, Supermarket News, Los
Angeles Times,The Wise Marketer, CPGMatters.com and New York Magazine.
Matthew is also Co-Chairman of the Promotion Marketing Association's Coupon Council; a
Matthew Tilley member of the Association of Coupon Professionals' Taskforce on Mobile and Electronic
Professionals
Director of Couponing; chairman of the ACP’s Market Research taskforce; a member of the Direct
Marketing, Inmar Marketing Association's Mobile Marketing Council; and a member of the Mobile Marketing
Association’s mCoupon committee.
matthew.tilley@ He has been with Inmar 10 years, in various marketing roles.
inmar.com
Prior to Inmar, he managed branding, advertising, public relations and government relations
campaigns for banking, entertainment, media, heath care and consumer product clients.
336.631.2524
Matthew holds a B.A. in Journalism from Bob Jones University and an M.B.A. from Wake
Forest University s Babcock Graduate School of Management
University's Management.
2

3. Asking a question
3

4. Methodology
What s
What’s Covered
• Consolidated data from Inmar’s coupon database
• Extrapolated industry statistics
• Consumer Packaged Goods coupons
• All classes of trade and product categories
• In ad
In-ad Coupons
What s
What’s Not Covered
• “Local” advertiser coupons
• Restaurant coupon, other “Self-redeeming” coupons
• Retailer coupons
4
© Inmar 2009

5. What happened in 2009?
• C
Consumers redeemed a l t of coupons
d d lot f
• Brands made more coupons available
• Everybody grew cautiously optimistic
y yg y p
• The (coupon) world dramatically changed
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© Inmar 2009

6. Consumers Use More Coupons
2000: 4.4 Billion
2009 2009: 3.3 Billion
vs. 2008:
+27%
redemptions
6

7. Back to the Future
2000: 4.4 Billion
2009: 3.3 Billion
2004 @ 3.2 Billion
7

8. Coupon Groups Increase, Use More
Units w/ Coupon Manufacturer Coupon Users
104 + Enthusiasts 13 Enthusiasts
E th i t 15
Super Super
51– 103 7 Heavy 9
Heavy
28– 50 Heavy 2 Heavy 2
15– 27 Medium 0 Medium 1
Low -6 Low
4– 14 -5
1– 3 Super Low -9 Super Low
-10
Non-Users 2 Non-Users 0
% Chg. in U.S. Households % Chg. in Mfg. Coupon Units
Source: Homescan®, a service of The Nielsen Company; UPC-coded purchases; 26 weeks ending 06/27/09 versus year ago
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© Inmar 2009

9. Five quarters of growth
2009: 3.3 Billion
redeemed; 27%
annual increase
li
2006-2008: 2.6 Billion
coupons redeemed annually
9
© Inmar 2009

10. All Major Trade Classes Show Growth
Class of Trade Redemption Growth
Convenience +12%
Conventional Supermarket +20%
Dollar/Discount/Variety
y +71%
Mass Merchandiser +26%
Military Commissary +12%
Pharmacy +16%
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© Inmar 2009

11. Started with food …
Overall Food
F d Non-Food
N F d
%Change in
Redemption
Q1 09 +17% +22% +9%
Q2 09 +33% +27% +46%
Q3 09 +29% +26% +45%
Q4 09 +26% +14% +37%
FY 2009 +27% +31% +20%
3.3 billion coupons 2.1 billion coupons 1.2 billion coupons
Percent change in coupon redemption comparing current year’s period to the same period a year ago
redemption, year s ago.
11

12. “If You Can’t Eat It, You Don’t Need It”
Top 15 Categories: % Unit Growth (FDM w/WM)
Canning & Freezing Supplies 10.9
Fresh Meat 7.0
Frozen Novelties 6.8
Cheese 5.5
Vitamins 5.4
54
Baking Mixes 5.2
Yogurt 4.8
Wine 4.6
Pasta 4.5 Back to basics
Fresh Produce 4.5
continues
Refrigerated Juices & Drinks 4.2
Prepared Foods-Dry Mixes
Foods Dry 4.0
40
Condiments, Gravies & Sauces 3.9
Shortening/Oil 3.7
Spices/Seasoning/Extracts 3.5
Source: Scantrack®, a service of The Nielsen Company; (FDM w/ Walmart) 52 weeks ending 11/28/09 (versus prior year) – minimum $100 million in sales
U.S. Buying Trends March 31, 2010 Page 12 Confidential & Proprietary
Copyright © 2009 The Nielsen Company

13. Switched to non-food…
Overall Food
F d Non-Food
N F d
%Change in
Redemption
Q1 09 +17% +22% +9%
Q2 09 +33% +27% +46%
Q3 09 +29% +26% +45%
Q4 09 +26% +14% +37%
FY 2009 +27% +31% +20%
3.3 billion coupons 2.1 billion coupons 1.2 billion coupons
Percent change in coupon redemption comparing current year’s period to the same period a year ago
redemption, year s ago.
13

14. Non-Edibles Leading Unit Decline
Economy driving
% Unit Growth (FDM w/WM) consumers to make trade-
offs or buy less
ff b l
7.0
4.5
45
2.9
2.1 1.8
1.0 0.9
-0.3 -0.5
li
l
i ry
A
en
t
ch
y
od
ta
t
De
e
ea
s
HB
ea
r
uc
ge
To
Da
ce
oz
er
Fo
M
M
-2.6
od
-2.8
ra
M
ro
Fr
n-
h
d
ve
G
es
Pr
n
ge
No
Ge
y
Be
Fr
h
a
Dr
es
ck
ic
Pa
Fr
l
ho
co
Al
-8.2
Source: Scantrack®, a service of The Nielsen Company; (FDM w/ Walmart) 52 weeks ending 11/28/09 (versus prior year)
U.S. Buying Trends March 31, 2010 Page 14 Confidential & Proprietary
Copyright © 2009 The Nielsen Company

15. Overall driven by food coupons
Overall Food
F d Non-Food
N F d
%Change in
Redemption
Q1 09 +17% +22% +9%
Q2 09 +33% +27% +46%
Q3 09 +29% +26% +45%
Q4 09 +26% +14% +37%
FY 2009 +27% +31% +20%
3.3 billion coupons 2.1 billion coupons 1.2 billion coupons
Percent change in coupon redemption comparing current year’s period to the same period a year ago
redemption, year s ago.
15

16. Top Redemption Growth Methods
top 10 with significant redemption
p g p
Method Redemption
Growth
Internet 263%
Direct Mail 69%
Magazine Pop-up 51%
Instant Redeemable 48%
Direct Mail Co-op 45%
Electronic Checkout 39%
Free-standing I
F t di Insert
t 36%
Digital Promotions 31%
Shelf Pad 30%
In-ad 27%
16

17. More Coupons Made Available
2009: 367 Billion
2000: 321 Billion 2009
vs. 2008:
+14%
distribution
17

18. Giving them what they want … Part 1
Overall Food
F d Non-Food
N F d
%Change in
Distribution
Q1 09 +16% +25% +9%
Q2 09 +20% +31% +12%
Q3 09 +10% +4% +21%
Q4 09 +13% NC +18%
FY 2009 +14% +17% +13%
367 billion coupons 148 billion coupons 219 billion coupons
Percent change in coupon redemption comparing current year’s period to the same period a year ago
redemption, year s ago.
18

19. Giving them what they want … Part 2
Overall Food
F d Non-Food
N F d
%Change in
Distribution
Q1 09 +16% +25% +9%
Q2 09 +20% +31% +12%
Q3 09 +10% +4% +21%
Q4 09 +13% NC +18%
FY 2009 +14% +17% +13%
367 billion coupons 148 billion coupons 219 billion coupons
Percent change in coupon redemption comparing current year’s period to the same period a year ago
redemption, year s ago.
19

20. Food Drives ’09 Distribution Growth
Overall Food
F d Non-Food
N F d
%Change in
Distribution
Q1 09 +16% +25% +9%
Q2 09 +20% +31% +12%
Q3 09 +10% +4% +21%
Q4 09 +13% NC +18%
FY 2009 +14% +17% +13%
367 billion coupons 148 billion coupons 219 billion coupons
Percent change in coupon redemption comparing current year’s period to the same period a year ago
redemption, year s ago.
20

21. An historic year
2009: 367 Billion
2005 @ 319 Billion
2000: 321 Billion
21

22. An historic year
Distribution Redemption
Year
Growth Growth
2009 +14% +27% ↑↑
2008 +5% NC ↑↔
2007 +8%
8% NC ↑↔
2006 -11% -13% ↓↓
2005 +5%
5% -6%
6% ↑↓
1992 +10% +3% ↑↑
22
© Inmar 2009

23. Cautious Optimism Gets its Due
• Th pros and cons of a bad economy
The d f b d
• Promotional bark with minimal bite
• Back to the basics, in a big way
g y
• New media grows up
23
© Inmar 2009

24. Cautious Optimism Gets its Due
• Th pros and cons of a bad economy
The d f b d
• Promotional bark with minimal bite
• Back to the basics, in a big way
g y
• New media grows up
24
© Inmar 2009

25. All Incomes Increasingly Looking for
Grocery Deals
% Change in Grocery Channel % Items on Deal % Items
on Deal*
12
10 33%
8 32%
6 29%
4
2
0 $70K +
$30 t $69 9K
to $69.9K
-2
< $29K
-4
-6
08 /08
09 /08
10 /08
11 /08
11 /08
12 /08
01 /08
02 /09
03 /09
04 /09
05 /09
06 /09
07 /09
08 /09
09 /09
10 /09
10 /09
11 /09
09
8/
2
9
6
4
1
9
7
4
1
1
8
6
3
1
8
5
3
1
/1
/0
/0
/0
/0
/2
/2
/2
/2
/2
/1
/1
/1
/1
/0
/0
/0
/3
/2
07
4-week period ending * Latest Period
Source: Homescan®, a service of The Nielsen Company; excludes gas only or Rx only trips; versus year ago
U.S. Retail Shopping Trip Trends March 31, 2010 Page 25 Confidential & Proprietary
Copyright © 2009 The Nielsen Company

26. 91% of Shoppers Plan Their Buys, but More
Opportunities to Capture Impulse Buys
Which one of the following best describes to what extent you plan your grocery
shopping?
Planned vs. Impulse Shopping:
Pl d I l Sh i
2% I usually plan what I want to buy and never buy additional items
45%
91% I usually plan what I want to buy, but sometimes buy additional items
98%
I usually plan what I want to buy, but always buy additional items
44%
I usually do not plan what I want to buy before I shop
9%
Source: Homescan® 09/2009 survey, a service of The Nielsen Company
U.S. Retail Shopping Trip Trends March 31, 2010 Page 26 Confidential & Proprietary
Copyright © 2009 The Nielsen Company

27. Results of promotion sensitivity
Higher
response
Private
Label
competitors
Brand
B d
competitors
Consumer
expectations
27

28. Cautious Optimism Gets its Due
• Th pros and cons of a bad economy
The d f b d
• Promotional bark with minimal bite
• Back to the basics, in a big way
g y
• New media grows up
28
© Inmar 2009

29. Mixed Signals or Managing Spend?
2008 2009 Pre 09
Pre-’09 Trend
321 billion 367 billion
Distribution
+5% +14% ↑
2.6 billion 3.3 billion
Redemption
±0% +27% ↓
$
$1.45 $
$1.44
Face values distributed distributed ↑
+10% -1%
2.9
2 9 months 2.6
2 6 months
Expiration periods
-3% -10% ↔
72% singles 74% singles
Purchase
requirements
i t 28% multiples 26% multiples ↑
29

30. How Consumers Responded
Distributed Redeemed
Face Values $1.44
$1 44 $1.07
$1 07
Expiration Periods 2.6 months 4.6 months
Purchase
requirements 1.52 1.65
30

31. More to gain … more to lose
• Increased counterfeit attempts
• Increased concern at checkout
• Increased vigilance in the industry
– Internet coupons
– High value coupons
– Consumer relations coupons
– General redemption assurance
31
© Inmar 2009

32. Cautious Optimism Gets its Due
• Th pros and cons of a bad economy
The d f b d
• Promotional bark with minimal bite
• Back to the basics, in a big way
g y
• New media grows up
32
© Inmar 2009

33. Methods Gaining Ground
Percent Volume Percent Volume
Method Distributed Distributed Redeemed Redeemed
Direct Mail + + + +
1.2% + 40% 3.4% +69%
Electronic + + + +
Checkout 1.2%
1 2% +23% 9.3%
9 3% +39%
FSIs + + + +
88.7% +16% 52.3% +36%
Internet + + + +
0.3% +92% 1.5% +263%
91.4%
91 4% 66.5%
66 5%

34. Methods Gaining Ground
Percent Volume Percent Volume
Method Distributed Distributed Redeemed Redeemed
Handout Off-
store location
- - - -
Handout Off-
store location - - - -
with sample
Military Shelf
y
Pad
- - - -
On Pack - - - -

35. Cautious Optimism Gets its Due
• Th pros and cons of a bad economy
The d f b d
• Promotional bark with minimal bite
• Back to the basics, in a big way
g y
• New media grows up
35
© Inmar 2009

36. Internet Coupon Redemption
2008: 1st Half 09: 2009:
+141% +308% +263%
• Significant distribution growth
• +92% in 2009 and 2008
• Growing importance:
•1.5% of all redemption
• 0 3% of all distribution
0.3%
• High response rates
• “Mixed” = 4 33%
Mixed 4.33%
• “Print only” = 19.56%
36
© Inmar 2009

37. Digital Promotions Redemption
• Growing share of redemption
– +31% redemption
– 1 5% of total
1.5%
• Still small share of distribution
– 0.1% of total
% f
• Significant consumer response
– 8.63% redemption rate
– 2048 redemption index
37
© Inmar 2009

38. The Inmar Solution
38
© Inmar 2009

39. What happened in 2009?
• C
Consumers redeemed a l t of coupons
d d lot f
• Brands made more coupons available
• Everybody grew cautiously optimistic
y yg y p
• The (coupon) world dramatically changed
39
© Inmar 2009

40. So … now what?
2009: 3.3 Billion
redeemed; 27%
annual increase
li
2006-2008: 2.6 Billion
coupons redeemed annually
40
© Inmar 2009

41. Coupon Redemption Drivers
? + – “moderating”
41
© Inmar 2009

42. Matthew Tilley
Director of Marketing Inmar
Marketing,
matthew.tilley@inmar.com
336.631.2524
336 631 2524
www.Inmar.com
42
© Inmar 2009