An abundant stack of coupons from Miramar MCAS Commissary in San Diego, CA. In 2014, the store produced over $58 million in sales and redeemed over 1.2 million coupons.
I’ve been asked time and time again if paper coupons are still relevant in the growing digital age and if so, which ones give you the most lift or conversion rate?
In 2014, The Defense Commissary Agency (DeCA) reported $80 million in paper coupon redemption dollars and the total number of coupons redeemed fell to 86 million, down 12 million coupons from 2013. However, the average redemption dollar amount in 2014 was $0.93 per coupon versus $0.91 in 2013, which would indicate that distribution is slipping but the total dollar value is increasing each year.
That is very important information to be aware of, but I want the data that allows us to drill down to the offers at store level.
I decided to do my own little coupon sample study knowing this would only be a microcosm of the bigger picture, but to me, nothing tells you what’s really going on at the Commissaries more than spending time in one. Piece by piece, I was going to find out what the industry was really offering military patrons – so to the Commissary I went.
You could say I was on a bit of a marketer’s high at the Miramar MCAS Commissary late on a Wednesday evening. I gleefully hunted for those little discount vouchers high and low, collecting offers from a wide variety of manufacturers. From one shelf to the next, I nearly found a coupon to support products within every category offered at DeCA.
Spices, desserts, frozen, pasta, organic, snacks, cleaning, dietary, beverages, canned goods, perishables… additional savings were basically throwing themselves to the consumer at every turn.
I collected 42 (I repeat, forty-two!) different coupon offers directly from the shelves within my first 45 minutes in the Commissary. Small ones, skinny ones, sticky ones, huge ones, shiny ones, matte ones, high and low value. (Note: This “super-scientific” method in this “study” was printed tear pad or loose coupons only; digital coupon support via the Commissary Rewards card and FSI’s were excluded.)
The offers collected were as follows:
| Save $2.00 on Three: 1 Coupon Total |
| Save $1.00 on Two: 9 Coupons Total |
| Save $1.00 on Four: 2 Coupons Total |
| Save $0.75 on One: 5 Coupons Total |
| Save $0.55 on Two: 1 Coupon Total |
| Save $0.50 on One: 9 Coupons Total |
| Save $0.50 on Two: 5 Coupons Total |
| Save $0.30 on Two: 1 Coupon Total |
| Save $0.25 on One: 4 Coupons Total |
| Save $0.20 on One: 1 Coupon Total |
| Save $0.15 on Three: 2 Coupons Total |
| Save $0.10 on One: 2 Coupons Total |
TOTAL COUPONS: 42
TOTAL COUPON DOLLARS: $26.30
AVERAGE VALUE PER COUPON: $0.63
HIGHEST OFFER PER UNIT: Save $0.75 on One (Note the higher value offers have higher purchase requirements, lessening the actual savings per unit.)
LOWEST OFFER PER UNIT: Save $0.15 on Three (Saving $0.05 per item)
You’ll see that my “super-scientific” study showed a lower average dollar value per coupon than DeCA’s comprehensive 2014 results. Could this be a trend for 2015 or just an anomaly?
It is important for manufacturers to note that while digital is growing, 95% of coupons redeemed in Commissaries are good old-fashioned paper coupons. While digital coupon frequency among the military is gradually increasing, paper coupons still reign, and the offers need to be highly strategic and aligned with what works best for your product.
Let’s look at the numbers again. Total Commissary coupon volume took a dive by 12 million from 2013 to 2014, but the digital coupons offered at DeCA only accounted for 2.8 million in 2014. This shows digital is growing, but they have a long way to go before replacing the old-fashioned paper tear pad.
As we are already two months into 2015, it’s important to view these findings as an opportunity to sweeten deals for military patrons and complete a strong first quarter. Try a few different higher-value offers to increase basket ring and drive unit sales beyond your average sale per customer visit. Continue to track redemption and tweak future offers accordingly.
For maximum reach and impact, paper is still an effective strategy with digital just beginning to gain in significance.
Finally, I was curious to see just how many coupons I would find in a store outside of the gates and compare that to my Commissary observations. So in an attempt to frame up my “super-scientific” study with a comparative market, I went to Ralph’s, a local grocer. I found four coupons in the entire store.
The Commissary is most certainly in a league of their own.
Stephanie Medlin
President and Founder
Branch 5 Marketing Collective
(858) 860-4039