Growth is good, if you're talking about your company's bottom line. But even then, steady and sustainable wins the race. The challenge is when growth is unpredictable and sporadic — the more so when that growth affects a cost to your business, like coupon redemption.
In recent years, the central coupon question on many promotions managers' minds has been, "How much of an increase in coupon redemption do I need to budget for this year?" With the industry, overall, seeing 5% more coupons redeemed in 2011 (January through September) than it saw in 2010, I'm confident quite a few of those managers got the answer wrong and had to start slashing late-year promotions because budgets were blown out early.
The consequence of this increased redemption has been a notable decline in the number of coupons distributed. Brands started 2011 cautiously, reducing available coupons by 7% in the first half. Then, as the consumer response continued to surge, brands pulled back further, resulting in a 13% decline in distribution in the third quarter.
The anticipated growth of redemption in the fourth quarter -- combined with the higher coupon response we've seen from shoppers so far -- is sure to prompt continued distribution restraint from brands the rest of this year and, likely, into early 2012.