H1 2015 coupon trends (January - June) Can send you a dropbox link if you'd like to the hear the narration & slight trash-talking of our in house counsel.

1. © 2015 Inmar, Inc.

2. © 2015 Inmar, Inc.
AGENDA
• Intro/Bios/About
• Methodology
• Topline Findings
• Economic Conditions
• Trade Landscape
• Digital Trends
• Shopper Engagement
• So What Now What?

3. © 2015 Inmar, Inc. 3
SUSAN JONES
 Senior Director, Promotion Analytics
 Consumer Promotions Expert
 Extensive experience in operations and
marketing
 Celebrating 20 years at Inmar
 Whitaker Award winner
 Oversees an award-winning team!

4. © 2015 Inmar, Inc. 4
NICOLE STEWARD-STRENG
 Manager, Shopper Insights
 Sociologist and Family Demographer by training
 Quantitative researcher and project manager in
practice
 Helps clients understand how shoppers are
making purchase decisions
 Slightly more introverted than these other two
characters
nicole.steward-streng@inmar.com

5. © 2015 Inmar, Inc. 5
ANDREW COLEMAN
 Senior Analytics Lead, Promotion Analytics
 Brand, Shopper & Digital expertise
 Help manufacturers measure, improve and
understand the data they receive
 Help retailers organize, optimize and monetize
the data they generate
 Help agencies make sense of it all
 New dad

6. © 2015 Inmar, Inc. 6
• Privately-held company with Team
Support Center in Winston-Salem, NC
• 4,000+ employees
• 30+ facilities across North America
• Clients in 30 countries
• 35 years of experience working with
retailers, manufacturers and health
systems
• 25 clients in Fortune 100
About Inmar
We manage over $54 billion
a year in commerce value

7. © 2015 Inmar, Inc.
Premier provider of turnkey
solutions for trade promotion
management, validation, tracking
and reporting.
Supporting Retail and CPG trading
partners in the planning and
execution of Scan Down programs
7
In July 2015 Inmar acquires Cincinnati-based Scanner Applications
Enables the management of trade and consumer promotions, creating a
comprehensive suite of promotion products for Inmar clients.

8. © 2015 Inmar, Inc. 8
Methodology
Distribution and redemption data consolidated from the Inmar
coupon database.
Percent change compares activity throughout the first six
months of 2015 with activity from the first six months of 2014.
Industry distribution and redemption statistics extrapolated
using Inmar and Kantar Media data.
Analysis conducted to develop key insights.
Data cross-checked with major coupon distributors and third-
party vendors.

9. © 2015 Inmar, Inc. 9
Download your copy of the
Inmar 2015 Promotion
Industry Analysis
http://go.inmar.com/2015promotionindustryanalysis.html

10. © 2015 Inmar, Inc. 10
Who: Business professionals from the promotion, supply chain and healthcare
industries
When: April 12 – 14, 2016
Where: Winston-Salem, North Carolina
Why: To hear from senior subject matter experts and world-class thought leaders on
how data analytics can be used to build brand, create operational efficiencies and drive
improved business outcomes.
For more information, contact Maria Schnaith-Ivan at maria.schnaith-ivan@inmar.com

11. © 2015 Inmar, Inc.
Relevant terms:
Tips for understanding trends data
11
 Manufacturer offers
 Store offers
 Trade promotions
 Loyalty programs
 Discovery Context
which should not be confused with
 Distribution Method
Frequently cited methods:
DEP Dual Electronic and
Paper
EDO Electronic Discount Opt-
In / Load2Card
FSI Free-Standing Insert
IR / IRC Instant Redeemable /
Cross Ruff
NET Internet Printable / Print
at Home

12. © 2015 Inmar, Inc. 12
TOPLINE FINDINGS

13. © 2015 Inmar, Inc.
KEY FINDING: Coupon distribution (in billions)
13
H1 2014 H1 2015
177 173
Q1 Q2
Distribution Q1 + Q2 = H1 (IN BILLIONS)
97.5
75.3
+.8%
vs. Q1 2014
-6.4%
vs. Q2 2014
2.1%

14. © 2015 Inmar, Inc. 14
WOMP WOMP WOMP (Distribution by method)
Free-standing Insert
90.4%
Dual Electronic and Paper 1.8%
Magazine Pop-up 1.3%
Electronic Checkout 1.2%
All Others 5.3%

15. © 2015 Inmar, Inc.
H1 2014 H1 2015
KEY FINDING: Coupon redemption (in billions)
15
Q1 Q2
Redemption Q1 + Q2 = H1 (IN MILLIONS)
660.6 617.6
-10.0%
vs. Q1 2014
-14.7%
vs. Q2 2014
1.46
1.28
12.5%

16. © 2015 Inmar, Inc. 16
FSI still two out of five (Redemption by Method)
Free-standing
Insert
Electronic Checkout 7.7%
Shelf Pad 4.9%
Direct Mail 4.2%
Instant Redeemable Cross Ruff
Instant Redeemable
Dual Electronic and Paper 5.2%
Source: 2015 Inmar Coupon Trends
40.5%
Handout 3.4%
Internet 3.0%
Electronic Discount 2.6%
Other 8.8%
19.7%

17. © 2015 Inmar, Inc.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
FSI IR EC SP NET EDO HO
17
Average Redemption Rate by method, H1 2015
Free-Standing Insert Instant Redeemable Electronic Checkout Shelf Pad Internet Printable
/Print at Home
Electronic Discount
Opt-In / Load2Card
Handout
18.89%
0.41%
6.75%
10.81%
11.70%
5.80%
3.40%
(Remember: Your Mileage WILL Vary!)

18. © 2015 Inmar, Inc. 18
Marketing tactics impacting redemption
Average
Face Value
Distributed
Average
Purchase
Requirement
Distributed
Average
Redemption Period
Distributed
Source: 2015 Inmar Coupon Trends
$1.74 /coupon
+1.7%
1.38 /
-4.4%
2.0 months
-10.1%

19. © 2015 Inmar, Inc. 19
FOOD AND NON-FOOD OFFERS: Distribution
2014
Source: 2015 Inmar Coupon Trends
Non-Food
Food
61.5%
38.5%
2015
Non-Food
Food
63.1%
36.9%

20. © 2015 Inmar, Inc. 20
Topline averages vary significantly
Average
Purchase Requirement
Distributed
Average
Redemption Period
Distributed
Average
Face Value
Distributed
Source: 2015 Inmar Coupon Trends
$1.11
-3.9%
1.51 units
+2.1%
2.3 months
-3.4%
$2.10
+2.5%
1.3 units
-8.3%
1.8 months
-14.2%
FOOD NON-FOOD

21. © 2015 Inmar, Inc. 21
FOOD AND NON-FOOD OFFERS: Redemption
Source: 2015 Inmar Coupon Trends
2014
Non-Food
Food35.1%
64.9%
2015
Non-Food
Food37.6%
62.4%
This is what a 2.5%
swing looks like

22. © 2015 Inmar, Inc.
The quest for healthier options
22
 82% more fruits and
vegetables3
 76% drinking water, or low-
and no-calorie beverages3
 70% more foods with whole
grains3
 69% cutting back on foods
higher in added sugars3
52%
1 International Food Information Council Foundation, 2012 Food & Health Survey. 2Harvard School of Public Health “Do Healthier Foods and Diet Patterns Cost More Than Less
Healthy Options? A Systematic Review and Meta-Analysis,” December 5, 2013. 3 International Food Information Council Foundation, 2015 Food & Health Survey.
It’s not easy…
believe income taxes are
easier than making
healthy food choices1
$1.50
It’s expensive…
more per day for the
healthiest diets2
But shoppers are trying…

23. © 2015 Inmar, Inc. 23
How non-food offers affect the overall mix:
This is what a 2.5% swing does (to coupon trends)
they tend to generate
LOWER
redemption rates
All of which results in
LOWER OVERALL
redemption volume
In part because they
support products with
LONGER
purchase cycles
despite significantly
HIGHER
face values

24. © 2015 Inmar, Inc.
So what’s growing?
24
 Digital (Load2Card, eCoupon)
 Digital discovery (Dual, social)
 Retailer Loyalty Programs
 Mobile Adoption
 Targeting methodologies

25. © 2015 Inmar, Inc. 25
Inmar Canada (News from beyond the Wall)
Distribution Redemption
Overall -0.3% -14%
Food +25% -11%
Personal Care +13% -1%
Household -15% -28%

26. © 2015 Inmar, Inc. 26
LET’S TALK
ECONOMIC CONDITIONS
(Spoiler Alert: things are improving)

27. © 2015 Inmar, Inc. 27
Consumer Confidence Carousel
Source: The Conference Board
79.4
78.3
83.9
81.7 82.2
86.4
90.3
93.4
89
94.1
91
92.6
102.9
96.4
101.4
95.2 94.6
101.4
75
80
85
90
95
100
105
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15

28. © 2015 Inmar, Inc. 28
Mr. Unemployment’s Wild Ride
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 H1
2015
1.28
billion
2.62.6 2.6
Source: United States Bureau of Labor Statistics, Employed & Unemployed, ages 16 years old & over (seasonally adjusted)
5.3%
June 2015
Billions
5.7%
6.6%
8.0%
8.3%
9.2%9.8%
2.8
2.92.9
3.5
3.33.3
Industry Redemption (Billions)
UnemploymentRate(Percent)

29. © 2015 Inmar, Inc. 29
LET’S TALK TRADE

30. © 2015 Inmar, Inc. 30
Dollars shift from Consumer Promotions into Trade
Measurement helps…
“Trade Promotions” continue to grow, evolve and drive industry change
Yet traditionally hard to measure and “trend” across industry
Once started, pressure to “feed the beast” remains strong
But how to quantify success? Efficiency?

31. © 2015 Inmar, Inc.
Sizing the trade promotion landscape
31
 $1 Trillion globally
– Size doubled in past 10 years
– No signs of slowing down
– Affects over 20% consumer products
sold in the US
 Difficult to measure profitable
volume movement
– Only 33% break even (or better)
– 22% reduction in trade spend would
actually *increase* sales revenue
Source: Nielsen, The Path To Efficient Trade Promotions, February 2015

32. © 2015 Inmar, Inc. 32
Promotion efficiency an ongoing challenge
Source: Nielsen, The Path To Efficient Trade Promotions, February 2015

33. © 2015 Inmar, Inc.
Driving Trade Efficiency
33
Scan Programs are:
 More efficient
 Move more units
 Provide reliable
measurement

34. © 2015 Inmar, Inc. 34
LET’S TALK DIGITAL

35. © 2015 Inmar, Inc. 35
Quick industry perspective:
Digital Paperless
Distribution
+67%
Still a relatively small share of the mix:
Redemption
+57%
Distribution
0.3%
Redemption
2.6%
Year to Date Digital Milestones
Digital Paperless
Clips
600M
Print at Home
Prints
322M

36. © 2015 Inmar, Inc.
What is “good”? “Success”?
So is 5.8%
“It depends” is an unhelpful answer
36
What about digital paperless redemption rates?
What factors drive success?
After a few years of wild swings,
redemption rates appear to be
stabilizing

37. © 2015 Inmar, Inc. 37
Digital Methods at a glance…
NET
Internet
Printable
DEP
Dual Electronic
and Paper
EDO
Digital
Paperless
DISTRIBUTION Volume -20.1% +49.5% +66.8%
REDEMPTION Volume -28.4% +69.7% +56.54%
Share of Redemption 3.0% 5.2% 2.6%
Avg. Redemption Rate 11.70% 2.27% 5.80%

38. © 2015 Inmar, Inc.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
FSI EDO NET
38
Inmar & industry digital redemption highlights
Free-Standing Insert
(Industry)
Digital Paperless
(Industry)
Digital Paperless
(DPN Analysis)
Print at Home
(Industry)
Digital Paperless
Featured Offer
Digital Paperless
Store Offer
Digital Paperless
Special Placement
5.80%
0.41%
7.24%
11.70%
17.27%
19.11%
34.88%
Source: Inmar 2015 Promotion Industry Analysis; DPN Retailer Analysis
Industry
Inmar

39. © 2015 Inmar, Inc. 39
LET’S TALK
SHOPPER ENGAGEMENT

40. © 2015 Inmar, Inc. 40
Shopper Promotion Impact Report (SPIR)
• Category- or subcategory-level reports
• Annual benchmarks across metrics
• Data maps
Deliverables: Quarterly
and annual reports
• Motivations to purchase
• Coupon influence on decision
• Future intent
• Channel of preference
• Barriers to coupon use
Promotion-Centric,
Relevant Shopper Feedback
• Am I reaching the right customer with my
promotion plan?
• Am I spending on the right method mix?
• Am I maximizing my promotion dollars?
Questions We Hear
• Continuously collected online survey
• 2,200+ interviews per month
• Nationwide sample
• Used a coupon in the past 24 hours
Methodology

41. © 2015 Inmar, Inc. 41
About SHOPPER
PROMOTION IMPACT
REPORT Data
13,777
Coupon
Users
1,505
Non-Coupon
Users
Instances of
Coupon Use
32,560

42. © 2015 Inmar, Inc. 42
Where do shoppers use coupons?
1
42%
28%
5%
4%
2%
2%
15%
Supermarket
Mass Merchandiser
Drug Store
Warehouse Club
Convenience Store
Dollar Store
Other

43. © 2015 Inmar, Inc. 43
In what other
ways do
COUPONS
influence
PURCHASE
DECISION?
I happened to find a
coupon and it made
me add the product to
my list
34%
I delayed buying
the product until I
found this coupon
11%
I actively searched for a
coupon but would have
bought the item without one
20% I happened to find the
coupon but would have
bought the item without
one
36%

44. © 2015 Inmar, Inc. 44
Who is using coupons?
13% 29% 19% 14% 17% 9%
Income
<1%
18-24 25-34 35-44 45-54 55-64 65+
White
76%
Black
7%
Hispanic
10%
Other
7%
Race/Ethnicity
13%
29%
24%
16% 12%
4%
1%
Under $25k $25k-$49,999 $50k-74,999 $75k-$99,999 $100k-$149,999$150k-$249,999 $250k-
$499,999
$500k or more
Smartphone: 82%
Sunday Newspaper
Subscriber: 37%

45. © 2015 Inmar, Inc. 45
Unique respondents

46. © 2015 Inmar, Inc. 46
82% of respondents live in a Nielsen market

47. © 2015 Inmar, Inc. 47
How do coupon users change by category?
Sauces / Condiments
Bakery Items
Produce
Fresh Meats
Prepared Foods
Baby Formula
Wine/Beer
Spirits/Liquor
TOTAL 45% 10% 58%
Snacks
Frozen
Pet
Dairy
Canned/Jarred
Health
Coupon Users Index
Millennials Hispanics “Parents”
Coupon Users Index
Millennials Hispanics “Parents”
TOTAL 45% 10% 58%

48. © 2015 Inmar, Inc. 48
How do
shoppers use
COUPONS and
TRADE DEALS?
39%
53%
8%
PRODUCT WAS ALREADY ON SALE:
Yes
No
Don’t
Know

49. © 2015 Inmar, Inc. 49
How do coupons impact purchase behavior?
66%
of coupons changed
the shopper’s
purchase decision
42%
29%
14%
9%
6%
First Time Item
Purchase
Alternative
Brand
Purchase
Other Product Purchase
Within Brand
Accelerated
Purchase
Higher-Volume
Purchase

50. © 2015 Inmar, Inc. 50
What
manufacturer
coupon methods
do shoppers
report using?
Direct Mail 4%
Instant Redeemable and
Instant Redeemable Cross Ruff 5%
Tearpad 2%
Electronic Checkout 1%
Other 8%
Free-standing
Insert
Load to Card 20%
40%
Print at Home 20%

51. © 2015 Inmar, Inc. 51
Manufacturer coupon method use by shopper segment
Coupon User Index FSI IR/ IRC EC Tearpad PAH
Direct
Mail L2C
TOTAL 40% 5% 1% 2% 20% 4% 20%
Millennials
Hispanics
Parents

52. © 2015 Inmar, Inc.
PAH coupons impacting purchase behavior
52

53. © 2015 Inmar, Inc.
L2C coupons impacting purchase behavior
53

54. © 2015 Inmar, Inc. 54
Inmar’s Shopper Promotion Impact Report
Quarterly report at the category or
subcategory level
Provides relevant, timely shopper feedback
• Motivations to purchase
• Coupon influence on decision
• Future intent
• Channel of preference
• Barriers to coupon use

55. © 2015 Inmar, Inc. 55
SO WHAT
NOW WHAT

56. © 2015 Inmar, Inc.
Putting it all together
56
Five main stories:
1. Shifting balance between Food & Non-food offers impacting industry redemption
volume.
– For example, the shift toward natural / organic / fresh products (does this align with center store /
consumer promotion strategy)
2. Economic conditions improving (people aren’t quite as reliant on coupons and
discounts as they have been in recent years).
3. Dollars are shifting into trade programs.
– Legacy budgets squeezed & promotion investments being reevaluated
– Innovation is happening here
4. Ongoing growth of digital & mobile adoption is leading innovation across all
channels and classes of trade.
5. Shoppers are still ahead of the market: demanding a better, more integrated retail
experience.

57. © 2015 Inmar, Inc. 57
 Do you know your shopper…and how they are influenced by promotion?
 Has your promotion strategy kept up with changing economic conditions?
 How has the shift in food/non-food performance affected your
category/product? (Inmar can provide category level data to help.)
 Are you measuring trade? Do you know how to successfully activate with
your most important trading partners?
 Shoppers come in all shapes & sizes…and method discovery preferences –
be sure you meet them where they are…they aren’t LOOKING as hard.
So what Now what

58. © 2015 Inmar, Inc. 58
If we’re out of time, join us in the Promotions Room (Inmar’s LinkedIn group) for
further discussion, a link to download the presentation as well as a Q&A document.
andrew.coleman@inmar.com
336.631.2973
@andrew_coleman
nicole.steward-streng@inmar.com
336.631.2712
susan.jones@inmar.com
336.631.2568
@susanmjones8