Report: Retail utilization of FSI promotional vehicle up; overall FSI utilization down
MINNEAPOLIS — Despite an overall decrease in free standing insert coupon activity, retailer promotion pages within the FSI vehicles recorded a 30.7% increase to more than 17 billion pages in 2011, continuing the significant annual increases in retailer promotion activity, which began in 2007, Kantar Media reported Wednesday.
Overall, the number of free-standing insert coupons distributed through 2011 dropped 6.5% compared with 2010. This decline in FSI coupon activity followed two consecutive years of annual increases of 8% in 2009 and 7.2% in 2010.
Walmart took the top spot from Dollar General with a 746.1% increase to 3.9 billion pages. Dollar General, in the second spot, was up 23.5% to 2.8 billion pages, while Target dropped to third having remained flat at 2.2 billion pages. Other retailers ranked by FSI coupon activity, in order, included Walgreens, PetSmart, CVS/pharmacy, Family Dollar, PETCO, Kroger (banner) and Kmart.
Retailer promotion events continued to evolve as a promotion tactic in 2011. Seven-out-of-9 areas reported by Kantar Media increased the use of retailer promotion pages in 2011, including frozen products, personal care and healthcare product areas. The number of manufacturers utilizing this tactic increased 16.9% in 2011 and has more than doubled since 2007.
“Consumer packaged goods manufacturers continue to include FSI coupons as part of their marketing mix to reach millions of households with a relevant brand message and purchase incentive during a specific week,” stated David Hamric, general manager at Kantar Media Marx. “Increasingly, manufacturers and retailers are participating in cooperative events to influence [shoppers] on their path-to-purchase, making FSI coupons an important lead indicator of competitive promotion tactics, creative brand messaging and retailer promotion alignment.”
FSI coupon support was included as part of 291 new product introductions during this period, down from 344 during 2010. “FSI coupons continue to be an important advertising and promotion vehicle to create brand awareness and to incent trial purchasing for new product introductions,” Hamric noted.
In 2011, the frequency of FSI events declined slightly, with activity occurring on 47 of 52 weeks. The “pre-Mother’s Day” promotion week of May 1 had the greatest activity with a weighted average circulation of 156 pages. Oct. 2 was the second most heavily weighted week with a total of 137 pages, followed by the “pre-Labor Day” promotion week of Aug. 28 with 126 pages.
During 2011, more than $421 billion in consumer incentives were delivered via FSI coupons, down 6.7% from 2010. And for the first time in at least the last 10 years, FSI coupon average face value did not increase. At $1.55, average face value dropped 20 basis points versus 2010. Average expiration continued a steady downward trend with a decrease to 8.1 weeks, down 5.2% versus a year ago. These trends indicate that manufacturers are managing their financial exposure by maintaining current offer values, reducing the number of coupons distributed and shortening the length of time that these offers are available in the market.
Walmart vet Ron Loveless joins U.S. Preventive Medicine
DALLAS — U.S. Preventive Medicine on Wednesday named Ronald Loveless its vice chairman. Loveless will serve alongside vice chairman Ron Loeppke, who joined the company in 2008 to direct product innovation, research and clinical standards at the company.
Loveless, a Walmart retiree and first CEO of Sam’s Club, will play a key role in guiding the growth of U.S. Preventive Medicine in the United States, as well as international markets, the company stated.
"Ron’s expertise in helping to build what became the world’s largest company will be instrumental in guiding U.S. Preventive Medicine through the high growth phase of our company in the coming years," stated Christopher Fey, chairman and CEO. "His professional approach, contacts and merchandising knowledge will help lead our company to unparalleled opportunities across the [United States] and internationally."
Loveless was recognized as a key executive in the growth of Walmart by the company’s founder Sam Walton in his biography, "Made in America." Since his retirement from Walmart, Loveless has served as a consultant to retail and consumer products ventures in the United States, Canada and Middle East, and special projects with Walmart. Additionally, he has served on numerous advisory boards for startup entities. Loveless recently released a memoir of his career at Walmart, titled "Walmart Inside Out."
U.S. Preventive Medicine has developed a suite of prevention, early detection and chronic condition management products and services that improve health outcomes while reducing healthcare costs. The company is partnering with regional healthcare providers on expanding its program, namely its Prevention Plan, a program that enables individuals to determine their top health risks and receive a customized plan and coaching from nurses to lower those risks and become healthier.
K-VA-T adopts Revionics price-optimization systems
ABINGDON, Va. — Grocery chain K-VA-T Food Stores has adopted Revionics’ price-optimization systems, the 104-store chain said Wednesday.
The company will deploy Revionics’ Price Optimization and Promotion Optimization, which includes category planning tools, weekly price maintenance capabilities and optimized prices.
"Our primary goal in pricing is to offer our customers the most value for their grocery dollar," K-VA-T EVP merchandising and marketing Richard Gunn said. "Revionics offered the superior predictive analytical optimization tools we need to achieve this goal."