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Coupons Make A Comeback In All Retail Channels

NEW YORK -- The Great Recession of 2009 marked a coupon renaissance and all channels -- including dollar stores, mass merchandisers, convenience stores and drug stores -- posted double-digit redemption growth, according to a new report by Nielsen Inc.

The convenience channel, which accounts for 4 percent of redemptions, saw redemptions grow by 12 percent. Conventional supermarkets, with a 65-percent redemption share, saw 20 percent growth. Dollar/discount/variety stores and mass merchandisers, both of which account for 20 percent of redemptions, recorded 71-percent and 26-percent redemption growth, respectively. Pharmacies and military commissary, each of which account for 4 percent of redemptions, both saw 12-percent growth.

More affluent households dominate coupon usage; households with income of $100,000 and up were the primary drivers of coupon growth in 2009.

Coupon enthusiasts -- the heaviest users -- drove a disproportionate amount of sales and sales growth, shopping more frequently and buying more, Nielsen found.

More than half of larger households (3 or more members) are "enthusiasts," while older users (age 65 and older) are also important "heavier" and "super" coupon users.

"Manufacturers and retailers would do well to target enthusiasts as their shopping behavior and demographics make them extremely appealing," Nielsen found.

Coupon redemption hit a peak in 1999 at 4.6 billion, according to Inmar, which provides promotions, reverse logistics and other services to the retail and wholesale industry. Since then, coupon usage dropped steadily. During the three-year period ending 2008, annual manufacturer coupon redemptions leveled off at just 2.6 billion per year.

In 2009 however, redemptions grew by 27 percent as Americans searched for ways to cut household costs and get more for their money. NCH Marketing Services claimed 2009 coupon redemption levels "achieved the second highest year-over-year growth ever recorded."

Newspaper inserts are still the primary method of coupon distribution (89 percent) and redemption (53 percent). However, Internet redemption growth skyrocketed, rising 263 percent in 2009.

Manufacturers and retailers launched new ways to get coupons into consumers' hands, such as printable coupons on the Internet, in-store kiosks and discounts linked to frequent shopper cards via smartphones and computers. "It is easier than ever to distribute and use coupons, and this convenience is also a key driver of redemption growth," according to the Nielsen report.

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