Sunday, March 9, 2014
By AMY DUNN McClatchy Newspapers
The number of coupons used by Americans to stock their pantries plummeted 17 percent in 2012.
Coupons are sorted as the Savvy Savers Coupon Clippers gather in Garner, N.C., to swap their unwanted coupons for ones they want or need.
After surging during the Great Recession, the old-fashioned savings tool seems to have lost favor among consumers. Or has it?
Coupon industry insiders disagree on whether the drop is an aberration caused by a poor mix of coupon offers in 2012 or whether it signals the beginning of the end of the paper coupon era.
"There's a lot of discussion within the industry," said John Morgan, executive director of the Association of Coupon Professionals, the coupon industry's trade organization.
"The industry is not used to having double-digit (swings) either way," Morgan said. "That's a big deal. Historically, it has been slow single-digit (increases or decreases) either way."
With an uneven economic recovery as the backdrop, coupon-clipping shoppers have taken notice.
Kim Maney, 38, of Apex, N.C., shops at multiple supermarkets and drugstores, follows coupon blogs and takes advantage of double- and triple-coupon offers to stock her pantry. A lawyer, wife and mother of a 2-year-old, Maney said she has noticed a drop in the quality of paper coupons.
"A quarter off toilet paper? Really? What am I going to do with that?" said Maney, who admits to being "horrified by the idea I'd have to give somebody full price for something."
Last year, U.S. consumers redeemed 2.9 billion coupons on consumer packaged goods, which includes everything from cereal to toilet bowl cleaner. That's according to the most recent tally by NCH Marketing, a Deerfield, Ill.-based company and one of the country's major coupon clearinghouses. NCH is a division of Valassis, which publishes the Red Plum coupon inserts for newspapers.
The 17.1 percent drop in 2012 is even more dramatic considering that the total number of coupons made available -- paper and digital -- remained steady at 305 billion.
Charlie Brown, vice president of marketing at NCH, attributes the decline to a calculated move by manufacturers to correct an "unusually high" redemption rate in 2011.
Coupon redemption reached 3.5 billion coupons redeemed in 2011, a 6 percent increase over the previous year and a 26 percent increase since before the recession.
During the worst of the economic downturn, Morgan said, "marketers ramped up (coupon offers) to protect their market share."
In 2012, manufacturers put the brakes on coupons. The coupon values became skimpier, the expiration dates shorter, and oftentimes the coupons required that shoppers buy two or even three of an item before getting 55 cents off.
Manufacturers also issued more coupons for new products, which Brown said, "doesn't have the same level of appeal."
"For the manufacturer, the redemption of the coupon is an expense," he said, so they purposely made the coupon offers less attractive. "They don't want 100 percent of the coupons redeemed."
Coupon shoppers Veronica Shores, 48, of Raleigh, N.C., and Michelle Morton, 42, of North Raleigh, have also noticed the decline in coupon quality and adjusted their shopping habits to compensate.
Shores is on a fixed income and has relied on coupons to help make ends meet. She attends local coupon swaps, where she meets with other coupon clippers thumbing through stacks of everyone's cast-off coupons looking for the ones their families will use.
"They have really started dropping the coupon values," she said at a recent monthly swap held at Wake County's Southeast Regional Library in Garner, N.C. "It makes it harder to save." To supplement her coupon savings, she's also using more store brands.
In contrast, Morton has cut back on her coupon use. Raising three kids, she started wondering if her time clipping and organizing all those little slips of paper was time well spent.
"It got to be too overwhelming. It got to be where I was dreading it, cutting coupons and matching them to lists," she said. "I started to kind of realize, 'OK, is it worth my time?'" But that doesn't mean Morton has abandoned her search for deals.
She now does a lot of her shopping at the no-frills grocery chain, Aldi, where most of the products are store-brand and coupons aren't accepted. She hits Harris Teeter for the best of the coupon deals.
Citing the competitive nature of their business, manufacturers wouldn't discuss their coupon offerings. Jeff LeRoy, a representative for Procter & Gamble, declined to comment. "We consider coupon redemption information proprietary," he said in an emailed statement.
Likewise, grocery chains don't like to comment on coupon redemption. Harris Teeter would not comment beyond saying its coupon programs are popular.
PAPER COUPONS ON THE WAY OUT?
Heather George, vice president of brand strategy at Lowes Foods, acknowledged a dip in redemption but not as severe as the reported nationwide decline. She said Lowes Foods numbers were better because of its policy of offering every-day double coupons and occasional special coupon events.
Phil Lempert, a consumer analyst known as the Supermarket Guru, said he thinks the discussion about coupon expiration dates and lower coupon values, while valid, misses the point.
He argues that paper coupons, in particular, are an outmoded way of delivering deals to consumers, pointing out that only about 1 percent of all coupons are redeemed – even in a good year.
A contributing editor to Supermarket News, Lempert is the keynote speaker at the Association of Coupon Professionals annual meeting in New Orleans next month. He forecasts continuing drops in paper coupon redemption.
"We'll continue to see people empowered to save money but not the way it used to be," he said. "Look at how quickly we left our records, cassettes and CDs. When's the last time you wrote a real letter?
"Our smartphones are running our lives."
Lempert plans to be blunt in his keynote speech. "When you drop 17 percent in one year, you're like the Titanic," Lempert said. "You better get the lifeboats out or be ready to go down."
PREDICTIONS HARD TO MAKE
The sudden drop in coupon redemption has been felt by small companies that have sprouted up in recent years to capitalize on the coupon craze.
"Our business dropped by about 50 percent from 2011 to 2012," said Mindy Weschler, an Apex mother who runs TheCouponPro.com, shipping three-ring binders, plastic pages and dividers across the country. She's not optimistic for 2013.
Weschler, who also sells coupon supplies at The News & Observer coupon classes, started selling coupon organizers out of her home in 2009 and had a hard time keeping up with demand. She saw her online business grow to the point where she had to lease space to store her inventory. At the end of the month, she'll be moving the business back home.
"This was not our livelihood, so we're very fortunate in that respect," Weschler said. "It's sad but you've just got to roll with the trends."
Brown, the coupon clearinghouse executive, said his company doesn't forecast coupon trends. But he did say he suspects manufacturers would be "adjusting the dial" on their coupon offerings for 2013.
Based on his company's most recent consumer survey, he said consumers will continue to clip and save. Nearly 80 percent said they use coupons "always," "very often" or "sometimes." That number has remained steady over the last several years.
Jackie Warrick, the president of CouponCabin.com, an online site that compiles coupons and coupon codes on everything from groceries to the latest electronic gadgets, said she believes coupon savings are here to stay, although perhaps in different forms.
"I think companies are working to try to find the right mix," she said. "They definitely need to work on making coupons as hassle-free as possible."
As of 2012, about 90 percent of all coupons were still distributed in coupon books, the vast majority delivered via the Sunday newspaper. Thus far, the so-called "click-to-card" digital coupons that shoppers load to their store loyalty cards have amounted to only about 1 percent of coupons distributed, and redemption is similarly small.
Traditional coupon clippers have been slow to adopt them, citing their limitations. The paperless coupons are typically only good on one purchase and are not doubled in value as paper coupons often are. For instance, if a shopper wanted to buy three boxes of cereal and had three 50-cent paper coupons, the shopper would realize a $3 savings. That same shopper, using digital coupons, would only save 50 cents off one box.
But Inmar, a Winston Salem, N.C.-based company that analyzes coupon use and also operates paper coupon clearinghouses, is forecasting a surge in the popularity of paperless coupons. It's projecting a nearly 900 percent increase in paperless coupons by 2015.
And at least one supermarket chain has addressed the complaint that digital coupons can only be used once. Kroger recently released a set of digital coupons that permitted shoppers to use each one up to five times.
THE FUTURE IS DIGITAL
On one point, everyone agrees. The appetite for savings -- sparked by the recession -- remains high.
"Whether the economy is good or bad, people like to save money," Lempert said. "But it's not just about the coupon."
Consumers are buying private-label brands, they're shopping at dollar stores, and they're buying groceries at drugstores -- wherever they can find a deal, Lempert said.
Instead of coupons, Lempert recommends manufacturers and supermarkets ramp up efforts to entice shoppers through their smartphones using Twitter, Facebook and Instagram.
For instance, alerting consumers to in-store flash sales, when a particular item is marked down drastically for a short period of time, is a much more efficient and cheaper way to offer a deal, Lempert said.
Not all coupon clippers, however, are quite ready to embrace all-digital discounts.
"I would be very dismayed if I woke up one Sunday morning and I found there were no more coupons," Shores said.