FMCG giants turn to coupons in Germany

02 September 2009

BERLIN: Consumer goods companies such as Beiersdorf and Unilever are using coupons in an attempt to attract German shoppers to specific brands, at a time when spending levels in the country also appear to be stabilising.

Unilever issued some 50 million coupons for its Dove skincare range last month, a move that will be backed by TV and print advertising, as well as a direct mail campaign.

People spending €8 ($11; £7) or more on a selection of Dove products will receive a discount of €4, and the Anglo-Dutch firm intends to run this initiative until the end of 2009.

Earlier this year, Beiersdorf also delivered money-off vouchers to 15 million German households, offering a discount of €3 on Nivea-branded goods.

It used TV and online ads, as well as PR, to support the scheme, through which it aimed to "thank" its loyal customers and strengthen the position of the Nivea brand with both retailers and consumers.

Puma, the German sporting goods manufacturer, registered a 16% decline in profits in the last quarter, and argued this was largely attributable to an increased focus on discounting.

More positively for brand owners, the most recent monthly poll conducted by GfK, the research firm, reported that consumer confidence levels in Europe's largest economy improved for the fifth straight month.

The forward-looking index, based on the responses of 2,000 people, rose to 3.7 points for September, compared with the total of 3.4 points recorded for August.

"Pessimism about the economy has declined further. Inflation is dwindling and consumers have more cash in their wallets," GfK said. "The consumer climate is currently proving to be a significant support to the German economy."

Andreas Rees, a UniCredit economist, agreed there "is no denying that the German consumer proved to be surprisingly robust this year."

However, he added that "the major driver for the German economy will not be Mr. Average Citizen, but once again export-dependent companies."

"In the fourth quarter 2009 and the first quarter 2010, we expect consumer expenditures to shrink," concluded Rees.

Data sourced from Bloomberg/Horizon/Associated Press; additional content by WARC staff