As the recession barrels on, bargain businesses are seeing strong growth. One of those is the field of online coupons, which has seen tremendous expansion as consumers tighten their purse strings.
In the past few months of the economic downturn, searches for discounts and deals have risen online. Starting in January, 54% of consumers polled by ComScore classified online couponing sites as important to their shopping process. More than half of consumers say they are using coupons more often than even just a few months ago. 31% are using onilne coupon sites. That’s an increase of 25% according to Hitwise. In July, searches for generic coupons were up 172% from the same time last year and searches for retailer-specific coupons increased 34%.
We caught up with Savings.com CEO Loren Bendele to discuss the coupon resurgence this year and where it’s headed online.
Why are people so fascinated with online coupons all of a sudden?
Well, there’s coupons and online coupons. Coupons have been popular for a long time. 80% of all consumers say they use coupons. But what’s rapidly changing is people using online coupons. It’s been driven by a few things. Partly it’s due to what’s gone on in the economy. It’s more fashionable to look for deals. Also, there have been a few coupon sites that are creating great services. And people get excited about finding great deals. 20% of our traffic every month is repeat business that comes back again and again.
Why did it take so long for coupons to go online?
The coupon space has been very slow to move online. In 2006, 1/10 of 1%
all coupons were acquired online. In 2007 it was 1% and in 2008 it was
5%. The demographic skews older, and maybe is not savvy online. But the real
problem was that there weren’t truly great online coupon sites. If
people had launched great user experiences, they would have been more
popular. One of the biggest problem we found when we leaunched is that
people didn’t like online coupons because none of the deals worked. We
started by making a simple website, and people started realizing this
was a great thing. We also spend a lot of time making sure all of our
Why have coupons become so popular during the recession? Will they fall out of favor when the economy recovers?
When the economy collapsed at the end of 2008, more people started
looking for better ways to save money and finding online coupon sites.
I think around the same time there have been a lot of online coupon
sites that started doing interesting things. I think the key has been
building a community and social network around coupons so that
individuals are deciding what the best deals are.
We grew 400% last year and this year we are set to grow about 300%. What I think will happen, is that people will be forced to change their behavior. They’re realizing they can find a great deal online. Once they know how to do that, they’ll continue to do it. Before I buy anything, I go to Savings.com to see if there’s a great deal for it.
I look at my mom, who still saves aluminum foil. She started that around in WWII when prices went through the roof for tin. She still saves it when there’s no value to do it. I think that most people don’t think TKTKTK
What kinds of technological advances are we going to see in couponing coming up?
I think what’s going to happen, whether it’s through mobile, Twitter, or whatever, we’re going to identify who these best deal professionals are. Whatever it is you want to find, first you’ll read their tips and send them an email or ask them questions. We’re focused on identifying the real people who know how to get the best deals and making them accessible to everyone else.
In the mobile space we’ll be seeing some advances. I’m almost agnostic about how people access my coupons. I just want to make it as simple as possible. One interesting thing with mobile is the location based application. Potentially you could be hit with messaging, if you want to be told whenever a great deal is within five miles of you, someone can send an SMS or email or whatever. Most people are still buying things from their computer right now, but mobile is definitely an interesting channel that you’ve got to be prepared for.
What are you doing to prepare for that?
We’re relaunching our website to focus more on the community elements. Also, we’re giving more prominence to individuals, who are best at knowing what they’re looking for. We’re encouraging people to be more active on the site. Also, we’re going to bring our top deal pros together in one place. People will be able to conference about saving money and hear directly what the pros found to be the best tips and tricks to understand what they want and what they’re looking for. Our merchants are really excited about that.