Report: Digitally distributed coupons increases in H1 2015

MINNEAPOLIS — The number of digitally distributed coupons for consumer packaged goods brands on key websites increased by 16.7% in the first half of 2015, according to a report from Kantar Media.



Food areas — especially the dry grocery area — accounted for the increase, according to Darcy Douglas, director of Marx Account Solutions at Kantar.

                                  

“This fluctuation may signal a shift in the way manufacturers are leveraging digitally distributed coupons to target shoppers online,” Douglas said. “Manufacturers often apply different strategies and tactics to their digital promotions, compared to print promotions, and will adjust digital promotions on the fly, depending on how quickly shoppers respond to digital incentives across various websites.”

In H1 2015, incentives that retail channels offered on digitally distributed coupons reached $1.72 across all areas and retail channels — a 4.2% increase year over year, according to Kantar. But incentive levels varied markedly among different retail channels.



“Incentives are a critical part of a digitally distributed promotion, and misaligning your incentives could mean the difference between a brand offer being clipped or printed or just ignored,” Douglas said.

The dollar channel websites had the lowest level of incentives in H1 2015, at $1.41. This level was 27% below the incentives offered on mass channel websites and “significantly below” drug channel websites, which offered the greatest incentive at $1.94, the report said.

“Promotion incentive tactics should not be ignored in the dollar channel,” Douglas said. “It is critical for companies planning digital promotions to understand how incentives and investment levels compare across different channels, and know how these programs could impact their brands and categories.”

Understanding incentives and investment levels requires close analysis.

“Determining the right digital incentive level takes partnership with a retailer, knowledge of the product and an analysis of which websites are performing best in the drug channel,” Douglas said. “And, to really deliver value, a brand should understand your competitor’s incentives, across the same websites.”

In the vitamins category, the dollar channel balanced lower incentives with increases in coupon activity, according to Kantar. Average face value remained at $1.86 — significantly below the average incentive of $3.43 seen in the mass channel in H1 2015.

Estimated expenditures, on the other hand, experienced over 600% growth during that period, while drug and mass channel websites growth actually saw declines in H1 2015, Kantar said. These significant increases allowed the dollar channel to actually outspend mass in the vitamin category.