For CPG Shoppers, Personalized, ‘Multi-Tier’ Digital Coupons Lift Purchase Volume Of Individual Items
Grocery shoppers who received directed promos were more likely to buy more of the same products, Catalina’s research shows.
Supermarket brands have long relied on coupon sections included in newspapers to drive sales, but consumer packaged goods-focused data and advertising network Catalina aims to show that its digital update of those old Free Standing Inserts (FSI) can do more to increase brand volume and loyalty for promoted products while growing category volume for retailers.
CPG Struggles At The Shelf
The CPG shopper targeting and analytics provider’s report, Expand Demand. Driving Efficient Volume Through Category Marketing, finds that its “data-driven” CCM campaigns generated response rates of 20 percent among targeted buyers, who on average increased the amount of items they bought by 2.4 times during a campaign.
The numbers represent a sign of hope for CPG marketers, says Beth Johnson, Catalina’s executive director for Special Projects and the report’s author. A September study by Catalina found a “loss of loyalty” among consumers that led to total sales numbers at grocers and markets being flat for the top 100 brands, as the biggest 62 CPG names saw declines.
“Many of our CPG brands are having a difficult time really sustaining growth year over year,” Johnson said. “They’re facing a lot of pressure about building volume efficiently and with a positive return on investment. There’s need to really find new marketing and promotion solutions that are going to drive that efficient growth.”
In the 130 CCM campaigns examined in this study, which was conducted across all of 2015, higher response rates were produced when consumers were offered greater choice in terms of items.
Above all, the campaigns that showed the most effectiveness — more frequent purchases with more products in their shopping cart at checkout — had rewards tied to how much a consumer bought. Ultimately, response rates (i.e., how many people accepted the multiple offers) among targeted shoppers were 44 percent higher for three-level reward offers compared to CCM campaigns with one level of reward.
“What’s important is that our rewards represent dollars off in that shopping order,” Johnson said. “It’s not another product coupon. It’s not as if, ‘You bought this product, here’s a coupon for your next purchase of that product.’ instead, we’re letting you know that if you purchase this product in multiple quantities, you’re going to get say up to $2 or $3 off your next shopping order. It’s really like giving them cash for their next shopping trip.”
Target Shoppers With Targeted Savings
In essence, coupon offers that demonstrate savings in the moment for targeted consumers is what drives “shopping engagement.” It’s a simple equation for a shopper: You’re purchasing an item that you’ll come back regularly for, why not buy — and save — today what you’re likely to buy tomorrow or next week.
What makes Catalina’s findings worth paying attention to is the scale of its reach to shoppers: Its CCM campaigns factor in evolving purchase data for CPG products from 260 million U.S. shoppers across more than 27,000 grocery, drug, and mass stores nationwide. The company’s network also has the ability to analyze more than 1.2 billion US shopping trips every month.
Among the report’s other topline findings:
- On average, 20 percent of all targeted shoppers responded to a CCM campaign by purchasing the minimum amount of promoted items required for a reward.
- Those who responded to a campaign purchased an average of 2.4 times as much product as they did in the previous time period, growing their aggregated contribution to product volume from 11 percent before the campaign to 27 percent during the campaign period.
- Share of requirement, a strong measure of loyalty, grew dramatically among responders, from 37 percent in the pre-campaign period to 56 percent during the campaign. In addition, SOR remained elevated, at 42 percent, in the post campaign period.
- Retailers benefited from CCM due to higher overall category sales. On average, total category volume grew 14 percent compared to the pre period, driven by a 63 percent increase in category volume among responders.