Valassis releases annual coupon industry report

The authoritative 2007 Valassis Annual Coupon Report reveals key findings on the state of the UK's voucher and coupon industry.

The Valassis Annual Coupon Report has been regarded as the UK sales promotion industry's "bible" for a quarter of a century.

The 2007 edition, which tracks coupon industry activity in the year ending January 2007, is based on more than 95 per cent of UK coupon activity.

Some of the key findings are as follows.

* 3.47 billion coupons distributed in 2006.

* Internet coupon distribution doubles - but still less than 1 per cent of total.

* 58 per cent of distribution via direct mail, down 9 per cent on previous year.

* DM continues to deliver best redemption rate - 16 per cent.

* Average distribution value increases to GBP1.08 from 89p in previous year.

* Average redemption rate of 10.2 per cent of coupons redeemed.

* Average redemption value increases to GBP1.11, 5p up on previous year.

The majority of the UK's 3.5 billion coupons continue to be distributed by direct mail (58 per cent), down from last year's 70 per cent high-point, according to the authoritative Valassis 2007 Annual Coupon Report.

"Since this drop in DM's market share was accompanied by a significant increase in redemption levels, it is logical to assume that more accurate targeting is generating this dual effect," said Ming Blackburn, Valassis' marketing manger.

"Distribution via the second most popular medium, magazines, increased by 50 per cent year on year to take a 15 per cent market share; this gain can be attributed at least in part to the growth of retailer magazines".

In-store distribution also increased, back to its 2004 level of around 6 per cent.

The "other" category doubled in size but still accounts for less than 9 per cent of the total marketplace.

"Internet distribution, part of the "other" category, increased, but still accounts for only a fraction of one per cent of the market," said Blackburn.

Most of the remaining media categories experienced only minimal change.

Direct mail continues to generate a response level higher than that of any other delivery medium at 16 per cent - up 2 per cent on last year and accounting for 86 per cent of the almost 353 million redeemed coupons.

Redemption rates for coupons delivered door to door also increased, although the redemption rate via newspapers declined.

More coupons were issued for newspapers than for any other item (this sector also topped the table two years ago).

"Money off when you spend GBPxxx" was in the number two position, followed by retailer specific promotions.

The still and soft drink category has entered the top ten for both distribution and redemption.

Prepared and ready meals also moved up the distribution table, from eight to five, reflecting a change in lifestyles.

Distribution Top 10 (2007 Report): 1 Newspaper; 2 Money off when you spend GBPxxx; 3 Retailer specific; 4 Still soft drinks; 5 Prepared and ready meals; 6 Milk, butter, egg and cheese; 7 Household cleaners; 8 Yoghurt, mousses; 9 Other health and beauty; 10 Bread, rolls and other bakery products.

Some 10.2 per cent of coupons were redeemed in 2006 - at an average redemption value of GBP1.11, up 5 per cent on 2005.

"The average direct mail redemption rate is still climbing steadily - at 15.98 per cent - up from 14.38 per cent - and a considerable increase on 2002, when it was 10.8 per cent rising to 11.26 per cent in 2003," said Blackburn.

"Redemptions of coupons distributed door to door also increased - to 4.91 per cent from 3.62 per cent".

Coupon Redemption top ten (2007 report): 1 Retailer-specific; 2 Newspaper; 3 Money off when you spend GBPxxx; 4 Milk, butter, egg and cheese; 5 Baby products; 6 Confectionery, crisps, nuts; 7 Prepared and ready meals; 8 Laundry/detergent, softener; 9 Still soft drinks; 10 Breakfast cereals.

Because Valassis processes and data manages the coupons from all the major UK retailers as well as working on behalf of 85 per cent of the UK manufacturers, it receives non-client manufacturer coupons from the retailers then passes them on for third-party clearing.

Therefore, it can accurately monitor almost all UK coupon activity.

Valassis processes and data manages 85 per cent of UK coupons and sales promotion industry statistics are based on its findings.

The Valassis Annual Coupon Report has for 25 years tracked the voucher and coupon industry's statistics.

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