As a deals association, part of our mandate is to deliver research and data across all sectors of the deals industry. Although that is relatively easier to do for the local offers/daily deal market, it is rather frustrating for the couponing market. Quite simply, there is an abundance of information on couponing in the USA and a rather meager amount available for Canada. Slowly and surely we will work with the various players in the industry to try and change that. So, whenever we can offer our audience some data on the couponing market, we get excited. Here it goes.
Enter D+H. They are one of the largest providers of technology and services to financial institutions. They drove over $750 million in revenues last year. They also happen to be the largest redemption and clearing service for CPG coupons in Canada. They are entrusted with almost all coupon payments in Canada. That’s over $100 million in redeemed value annually…just in Canada. Given the size of their redemption, it is safe to say that the data that comes out of D+H is essentially the norm for Canada.
Here are some interesting points about couponing in Canada for the 2012 year as provided by D+H data. Further data points will be released over the coming weeks. Other Data is provided by other sources such as NCH/Valassis.
The amount of coupons distributed consistently increases per year. About 6.8 billion for 2012. That’s a tremendous amount of activity and potential savings for consumers.
Now, let’s take a look at how many of those 6.8 billion coupons distributed were actually used and redeemed. Interesting! Only 86 million were redeemed last year. That’s only 1.26% of distribution. That’s a decrease from 1.5% of distribution in 2010 which translates to an overall decline in redemption from 2010 by 9.4%. Why the decline? (the US dropped about 17%). Most have attributed the decline to an abundance of other “deals” that are available for consumers (daily deals, online and mobile offers, savings cards, loyalty programs, etc) and a difference in what marketers decided to distribute versus other years. It could also mean an improvement in the economy. Despite the decline, there is still 86 million coupons being redeemed. That is quite significant. Let’s put it into comparison with the USA. typically there is a 10% rule attributed to anything Canada does compared to the US. so anything above 10% is great for Canada.
As such, # of coupons distributed in the US, about 305 billion. Canada: 6.8 billion. That is only 2.2% of the US, significantly low. How about Redemption? In the US, about 2.9 billion are redeemed on about 300 billion distributed. Canada has 86 million redeemed. That’s 2.9% of the US number.
However, these numbers tell us that Canadians redeem more than their US counterparts. 1.26% versus about 1% for the US.
Bottom line, there is a lot of room to grow in terms of coupon distribution and redemption in Canada.
So what categories are the most popular? The top 3 are household coupons, Personal care coupons, and Food coupons. Ok fine, but these are just those that are distributed and marketed to consumers. This shows what the retailers and manufacturers want to sell. How about what the consumer actually redeems and buys. Take a look at the next chart below.
The following chart shows what consumers are actually redeeming and buying in terms of CPG coupons. Quite different from what he marketers are distributing. Perhaps marketers should listen to consumers more often in terms of food savings instead of pushing margin heavy products in the personal care and household categories. The top product categories that consumers purchased are: 1. Food, 2. Personal Care, 3. Household.
We will publish some other finding that we find tell a good story. Of note are internet based coupon distribution and redemption numbers that tell a vivid story. Stay tuned. All in all, the market for couponing in Canada has plenty of room to grow. From Affiliate networks carrying more Canadian stores to coupon distribution and redemption being more inline with the consumer population spending as compared to the US.
If you have further coupon data to share with us and our audience, we would appreciate it if you do so.