Marketers to Boost Use of Online Coupons and Daily Deals

Merchants continue to move some of their traditional coupon marketing budgets online. At the same time, another group of operators are seeking to use the coupon strategy to generate huge discounts for consumers will to participate in group buying . Currently, almost half of Internet users are redeeming online coupons or codes and the market is growing.

According to eMarketer, the numbers of adult online coupon users and the percentage of Internet users turning to these coupons will look like this over the next few years:

  • 2011 88.2 million (online coupon users) 47% (of Internet users)
  • 2012 92.5 million 48%
  • 2013 96.8 million 49%

Last year, consumers redeemed a record $1.2 billion in digital coupons. And as I noted in a blog post earlier this year, consumers who use digital coupons have average household income of $105,000.

Consumers are also clearly interested in obtaining deals through the group purchase/​daily deal concept. The leading operator in this market space, Groupon, finished 2010 with $713 million in revenue and is on track to generate $2.4 billion this year. (Note that these are gross revenue figures and the company shares the revenue it takes in with its vendors.) At the end of last year, the company had over 50 million subscribers. Of these, 9 million had actually purchased a coupon. Another industry operator, YipIt, says that daily deals appeal to specific demographic groups. College-​educated women between the ages of 25 and 50 comprise a significant percentage of subscribers and deal buyers. This is because, “There are more local services that target women,” says Jim Moran, YipIt founder. Further, about 1/​3rd of Groupon’s subscribers have household incomes of $100,000 a year.

Worldwide, the kinds of deals that Groupon has served breaks out as follows:

  • Health/​beauty: 31%
  • Food/beverage:23%
  • Activities: 15%
  • Services: 11%
  • Events: 11%
  • Retail: 9%

Groupon’s rapid growth has been noticed by traditional media providers. Not long ago, the New York Times announced its own launch of a daily deal site. As more consumers show their interest in this method of promotion, marketers will be rolling out more deals in the hopes of increasing sales and winning over permanent customers for their good and services.

[Sources: Coupon to Groupon: New Channels for an Old Tradition. Emarketer​.com. June 2011. Web. 13 Jun. 2011; United States. Securities and Exchange Commission. Groupon: S‑1.  Edgar Online. 2011. Web. 13 Jun. 2011; Digital Coupons Represent Fastest Growing Coupon Segment in 2010. Couponsinc​.com. 8 Feb. 2011. Web. 8 Mar. 2011; Fuscaldo, Donna. Daily Deals Dissected: Where the Popular Offers Are and Who Is Buying] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.