CPGmatters: Digital More Effective Than Print for Attracting New Product Users
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Digital print-at-home coupons are more effective than print FSI (free-standing insert) coupons at getting consumers to try a product for the first time, but they yield an 18 percent lower ROI than print FSI coupons.
That’s the bottom line of a new study of coupon users drawn from Knowledge Network’s National Shopper Lab, a research-ready panel of 23 million loyalty card shoppers across the supermarket and drug store channels.
The analysis, which focuses on coupon trends from 2008 (the beginning of the recession) through 2010 shows that digital print-at-home coupons:
- Attract more new buyers by 35 percent
- Drive more incremental redemptions by 13 percent
- Yield 18 percent lower ROI than print FSIs (with ROI defined here as incremental profit divided by the cost of the couponing program).
The analysis also showed that digital coupons are showing important strengths. For the digital coupon events analyzed, 46 percent of redeemers were prior non-buyers of the product, compared to 34 percent for traditional print FSI coupons. In addition, digital coupons drive more incremental redemptions. More than three-quarters (77 percent) of redemption volume is incremental, versus 68 percent for print coupons.
The new findings also reveal coupon use among different consumer groups; the analysis has been keyed to 21 Acxiom PersonicX Life Stage groups and shows that:
- High-income young adults ("Taking Hold" group), Generation X ("GenX Singles"), and fledgling members of the workforce ("Beginnings") recorded some of the highest increases in overall coupon use, jumping by anywhere from 26 percent to 40 percent between 2008 and 2010.
- Well-off Baby Boomers ("Boomer Barons") and large families ("Jumbo Families") were among the strongest users of both digital and paper coupons.
"Although the bulk of the coupon business is still paper, digital coupons are doing an excellent job of attracting more affluent, savvy consumers," said Neal Heffernan, senior vice president and general manager at Knowledge Networks, in a statement. "Digital print-at-home coupons yield a lower ROI due to their higher redemption rates and the historically low distribution costs for print FSI coupons, but digital coupons have established a foothold with some key consumers that every brand wants to be friends with, such as large families and high-income Boomers."
A trend report outlining the study stressed that the shift to digital is still very much in progress. "But as more and more coupons can be carried on smartphones and loyalty cards, digital couponing will become more ingrained and less demanding."
- Digital More Effective than Print for Attracting New Product Users – CPGmatters
- Digital vs. Traditional Coupons: New KN Report Details Surprising Trends in ROI, User Groups – Knowledge Networks
- Digital Vs. Traditional Coupons – Knowledge Networks
Discussion Questions: Do you see digital coupons addressing a different need than free-standing inserts for brand marketers? What’s the next step for digital coupons?