Magazine article Marketing

Vouching for an Old Friend

Magazine article Marketing

Vouching for an Old Friend

Article excerpt

Last year saw an unprecedented surge in the distribution of money-off coupons. Here, Ken Gofton starts a regular series of Coupon Watch - to keep an eye on this fast-moving area

Money-off coupons are always popular in the run up to Christmas but, in the final quarter of 1994, their use really surged. This late rally turned what had stared as a pretty flat year for coupons into something of a boom. The total number of coupons distributed last year rose by 43.6% to 4.2 billion, with a face value of [pounds]1.4bn.

Historically, it's true that coupon usage has fluctuated wildly in the UK. This is in marked contrast to the situation in the US, where coupons are the dominant promotional technique and are distributed in vast numbers through free-standing inserts (FSIs) in newspapers - a medium which, so far, has failed to take off in a big way in this country.

One of the major reasons for UK fluctuations, however, has been the distaste of manufacturers for the supermarkets' casual attitude to misredemption. For a while, fired by inter-store rivalry - and in total disregard of their suppliers, who fund the coupons some retailers made a point of accepting any coupon against any product.

Last year, however, leading supermarket chains Sainsbury and Tesco began to tighten up on misredemption and the increased confidence that manufacturers gained from this is probably the biggest factor behind the latest surge.

At the same time, the fact that most of the leading supermarkets now have their own, large-circulation, in-store customer magazines containing coupons has swelled the number of coupons in circulation.

With this issue, we begin a quarterly "Coupon Watch" in collaboration with NCH Promotional Services which, as the leading coupon clearing house, is uniquely placed to monitor trends.

In future issues, we will analyse the data quarter by quarter and attempt to identify key trends in methods of distribution, sector usage, redemption levels and so on. However, this first report coincides with the release of data on the whole of 1994 and gives an opportunity to take a broad overview.

There are a couple of apparent contradictions which need to be talked through. For example, the quick summary for 1994 is: "Coupon distribution up, coupon redemption down" because, while distribution was up almost 44% to 4. …

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