1 CPG Coupons: The Consumer Perspective Association of Coupon Professionals April 16, 2015 NAM Proprietary and Confidential/For Client Use Only/Not to

1

CPG Coupons: The Consumer PerspectiveAssociation of Coupon Professionals

April 16, 2015

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Agenda

Headlines

Data Sources

The Coupon Media Landscape

FSI Coupon Insights

Digital Coupon Insights

The Millennial Coupon User

Key Conclusions and Implications

2

Headlines

1. Coupon users are CPG’s most important consumers*

2. Despite declines in newspaper circulation, consumers are still committed to using FSI coupons**

3. Millennials are not heavy CPG coupon users and are not as digitally focused for coupon usage as many marketers think**

*Based on GfK analysis of average spend on CPG products by coupon and non-coupon users, 2014; ** Based on Coupon Attitude and Usage Study, ECI, 2014

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Data Sources

All research information is consumer packaged goods coupon focused

National CPG Coupon Attitude and Usage Study; conducted in April, 2014 among 860 CPG Coupon users (defined as using 2 or more CPG coupons in the past 30 days)

GfK’s National Shopper Lab Frequent Shopper card analysis; analyzed over 180,000 FSI-redeeming households and compared to non-coupon using households – July, 2014

Coupon distribution and redemption by vehicle data from 2014


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Consumer Coupon Media Landscape


Share of Past 30-Day CPG Coupon Usage

70% of CPG coupon users use FSI

59% of CPG coupon users use Digital

30% use FSI coupons, but not digital, and 19% use Digital and not FSI

By using both, you can reach 89% of all coupon users

Base: Total Past 30 Day CPG Coupon Users (n=859) Q3) Even if you already mentioned it, which of the following sources of coupons have you used in the past 30 days?Of the 11% that do not use FSI or digital, 3% use in-store, 4% use checkout coupons and 4% use retailer circulator coupons. Others include direct and magazine coupons.

Source: News America Marketing Coupon Attitude and Usage Study, April, 2014; research fielded by Evaluative Criteria Incorporated based on 859 past 30 day users of CPG coupons (2 or more) recruited using nationally representative internet panels


CPG Coupon User Segments: Incidence (1) & Key Differentiating Attitudes

Four attitudinal segments identified

Source: News America Marketing Coupon Attitude and Usage Study, April, 2014; research fielded by ECI based on 859 past 30 day users of CPG coupons (2 or more) recruited using nationally representative internet panels. Base: Total Past 30 Day CPG Coupon Users (n=859), (1) 775 of the 859 classified into a segment re-percentaged to = 100%.

27%

20%25%

28%

Casual Coupon Users

• Low coupon involvement

• Prefer coupons downloaded to loyalty card

Coupon Strategizers

• Enjoy using coupons, worth the work, love the challenge to see

how much can save, tight budget

• Use both internet and paper coupons about equally

FSI Budget Constrained

• Prefer FSI from paid newspaper

• Need to use coupons in order to meet budget

FSI Enthusiasts

• Enjoy using paper coupons but financially not required to do so

• Coupons provide knowledge about new products


FSI and Digital Coupon Users spend substantially more on CPG products than the average household

Average Annual Dollars per Household

FSI Coupon Shoppers spend 19% more than the average shopper

$3,596

$3,013

$3,982Digital Print at HomeShoppers spend 32% moreThan the average shopper

Source: GfK Shopper, July, 2014; FSI: Across 290 campaigns vs. GfK database | n=2,166,383 HH’s for all shoppers | n=184,799 FSI Coupon shoppers | 52 weeks ending 4/30/2014 Digital: Across 160 campaigns vs. GfK database | n=2,165,499 HH’s for all shoppers | n=63,155 Digital Coupon shoppers | 52 weeks ending 12/31/2013


FSI Coupons account for 39% of all CPG Coupon Redemption;Digital coupons (PAH/D2C) account for about 5% of all redemptions

1Source: Inmar, 2015: http://www.prweb.com/releases/2015/coupon-trends-webinar/prweb12466628.htmInmar; only the top 9 distribution methods as rated by redemption are shown. The methods not shown account for 16.6% of all redemption

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Internet print-at-home coupons ranked #7 in terms of volume redeemed, at 3.5%; direct to card coupons ranked #9 accounted for 1.8% of all coupons redeemed


CPG Coupon Clipping Decisions Coupons are clipped primarily

for brands already use or to try a new brand or item

Coupons clipped for brands already used may tip the balance to the promoted brand when used by switcher consumers who have a consideration set of several brands in a category

Higher value coupons also take priority

Clip Coupons …

For brands already use

To Try New Items/ Brands

For new items by familiar brands

To try new brands that just came out

Those with higher coupon value amounts

To try existing brands/items never tried

Based on requests from others in household (e.g., spouse, kids, etc.)

That have long expiration dates

For special occasions / holiday / entertaining items

Base: Total Past 30 Day CPG Coupon Users (n=859); Q.18 How do you decide which coupons to clip?

Source: News America Marketing Coupon Attitude and Usage Study, April, 2014; research fielded by ECI based on 859 past 30 day users of CPG coupons (2 or more) recruited using nationally representative internet panels


If a couponed product is out of stock, there can be lost sales opportunities to brands and retailers

Base: Total Past 30 Day CPG Coupon Users (n=859)

Q.35 If you have a coupon for a product but it is out of stock in the

store, which of the following would you be most likely to do?

Come back to the same store on another occasion to use couponBuy another brandGo to another storeNot buy anything



FSI Consumer Behavior: Fast Facts

96% of FSI readers read most or all of the FSI

59% of FSI readers read the booklet at least 2 times

67% of FSI readers read the booklet the same day they receive it

61% of FSI readers clip the coupons immediately

1.8 adults on average read each FSI booklet

Source: News America Marketing Coupon Attitude and Usage Study, April, 2014; research fielded by ECI based on 859 past 30 day users of CPG coupons (2 or more) recruited using nationally representative internet panels; results for the 602 respondents who use the FSI


Ways Used Online CPG Coupons

Print to paper is the leading way Internet coupons are used. Downloading to shopper card follows

Base: Past 30 Day Internet/Mobile Coupon Users Mentioning A Source (n=461)

Q.23a: How have you used coupons online or from your mobile phone in the past 30 days?

Q.23b: And which one is the main way you have used coupons online or from your mobile phone?

Print out on paper to use

Download to store's frequent shopper card to use

Access on mobile phone to scan when check out

Print out on paper to use

Total Ways Used In Past 30 Days


59%23%

18%

Download tostore's frequent

shopper card to use

Access on mobile phoneto scan when

check out

Main Way Used


Consumers use Many Different Types of Websites to get CPG Coupons

Dedicated coupon websites have the

highest usage of Internet coupon

sources. Coupons from retailer

websites follow.

Note that traffic to individual sites

within each type is probably much

lower than the type total

Q.22b: Which of these sources have you used to obtain coupons online or from your

mobile phone in the past 30 days?

TotalUsers

Base: Aware of Internet/Mobile or Cell Phone CPG Coupon Sources (676)%

Internet / Mobile Coupon Source Past 30 Days Usage

Any (net) 81

Websites (subnet) 73

Dedicated to coupons 47

Retailer website 42

Company's or brand's website 35

Social media website (e.g., Facebook) 16

Newspaper website 9

Emailed to you 42

None of these 19

Mean 2.4



Newspaper Delivered Coupons are Rated Better by Dual Users onConvenience and Providing Information

Users of both Newspaper and Internet coupons favor Newspaper coupons for the following:Source I trustUse regularlyEasy to use

Provides Product Information



Q.7: Since you use both coupons found in the newspaper as well as coupons found

online, please tell us how the following statements describe your experience with both

newspaper and internet coupons.

60%

FSI: Digital:

Heavy FSI Coupon Users are Bigger CPG Spenders than Heavy Digital Coupon UsersFSI: Across 290 campaigns vs. GfK database | n=2,166,383 HH’s for all shoppers | n=184,799 FSI Coupon shoppers | 52 weeks ending 4/30/2014

Digital: Across 160 campaigns vs. GfK database | n=2,165,499 HH’s for all shoppers | n=63,155 Digital Coupon shoppers | 52 weeks ending 12/31/2013

35% $3.5kSpends Over

More Trips are MadeThan The Average Shopper

• FSI: 89 Trips or 1.7 Trips/Week• Digital: 90 Trips or 1.7 Trips/Week• All: 66 Trips or 1.3 Trips/Week

More Dollars Spent Per Trip Than The Average Shopper

• FSI: $72.77 per Trip• Digital: $67.06 per Trip• All: $45.37 per Trip

More Than The Average Shopper

• FSI: $6,488 per Year• Digital: $6,008 per Year• All: $3,013 per Year

FSI: Digital:

36% 48% $3.0k

FSI: Digital:Spends Over

Source: News America Marketing Heavy Coupon User Analysis , July 2014; research fielded by GFK based on 290 FSI Campaigns and 160 Digital Campaigns GFK’s Frequent Shopper Card Database of HH who used more than 90 coupons of any type in a year


Millennials


Millennials are Lighter Users of CPG Coupons

Source: News America Marketing Coupon Attitude and Usage Study, April, 2014; research fielded by ECI based on 859 past 30 day users of CPG coupons (2 or more) recruited using nationally representative internet panels. Note: The survey sample was demographically representative of the U.S. population. However, survey completion rates may vary by demographic group. All indices are based on Total US (Census). Base: Used 2+ CPG coupons in Past 30 days, (n=859) indexed to Total Census


Share of Past 30-Day CPG Coupon Usage Mix: Millennials

63% of Millennial CPG coupon users use FSI

66% of Millennial CPG coupon users use Digital

22% use FSI coupons, but not digital, and 25% use Digital and not FSI

By using both, you can reach 88% of all coupon users


Base: Total Past 30 Day CPG Coupon Users (n=182)

Q3. Even if you already mentioned it, which of the following sources of coupons have

you used in the past 30 days?

News America Marketing Perspective: Key Conclusions and Implications

Conclusion Implication

Coupon users are important CPG consumers

Continue to include couponing as a key tool within the marketing mix

Consumers use coupons from a variety of sources, but the FSI remains an important source of coupons

Use a diverse mix of coupon delivery media with FSI and digital coupons as components

Millennials are lighter coupon users and are not as heavily digital as perceived by some marketers

Include coupon vehicles to reach Millennials, including FSI and digital; make sure to reach other important demographics as part of a brand’s promotion strategy


Documents

1 CPG Coupons: The Consumer Perspective Association of Coupon Professionals April 16, 2015 NAM Proprietary and Confidential/For Client Use Only/Not to