When food prices rise and the economy weakens, coupon websites win big. Consumer pain is pure joy to sites such as Coupons.com and RetailMeNot.com, who offer digital coupons to people looking to save money wherever they can.
Digital Journal — U.S. bankruptcies are hitting Americans hard. The United Nations called this year’s crisis of rising food prices a “silent tsunami.” Consumers are smarting from a slowing economy, compelling them to cut costs and count their pocket change. While this is bad news for the average Joe and Jane, it’s good news for websites full of coupons for various consumer products.
Pageviews on online coupon sites rose 38 per cent, to 281 million, in March from a year earlier, according to comScore. Visitors to these sites spent a total of 145 million minutes surfing for deals, a 37 per cent increase. At Coupons.com, visitors saved $200 million with the site’s money-off deals in 2007. Food coupon page RetailMeNot.com‘s January traffic of 5,000 visitors exploded to 40,000 in March.
comScore analyst Andrew Lipsman told BusinessWeek: User engagement by deal-seekers appears to be ramping up. As a general rule, something like online coupon site activity would increase as a result of macroeconomic trends.
Fuelling the popularity of these digital coupons is the changing economic tide. Staples such as rice are costing more now than during previous years. The UN is providing up to $200 million to poor farmers coping with the food crisis. And as companies like General Mills announce they will sell smaller boxes of cereal without reducing their prices accordingly, sites like Coupons.com see an uptake in visitors checking out cereal deals.
Digital coupons have evolved into a burgeoning trend for cost-cutting consumers. And they’re fairly easy to “snip.” At Coupons.com, companies create coupons with special serial numbers which can be printed and redeemed at stores. Other sites like RetailMeNot.com allow people to post and share coupons redeemable at e-commerce sites. Some coupon sites add a dash of social networking, allowing members to rate online deals with a checkmark or “x” and comment on whether a coupon was useful.
Consumers are turning to the Web to clip quick savings, instead of relying on grocery flyers and newspaper ads. In a survey by ICOM, 58 per cent of respondents “see their coupon use increasing if they could download a coupon from the Internet and have it automatically connected to an electronically swiped frequent shopper card.” Also, three-quarters of those in the lucrative 18 to 34 age group said they are more likely or somewhat more likely to use coupons if they can access this paperless technology.
Peter Meyers, ICOM marketing vice president, said:
Brands should pay close attention to determine if this technology is right for their consumers.
Not only is the public clamouring to coupon sites, but so are businesses. When customers look for deals, corporations want to be in their face. Spending on online promotions, including contests and coupons, will almost triple to $22.8 billion (US) by 2012 from $8 billion in 2007, according to Borrell Associates.
There is no shortage of incentive for companies and consumers to turn to online coupons. As the economy worsens, more deal-seekers will be hunting for a quick fix to their budgetary woes, and coupons provide that Band-Aid help. But like any short-term solution, coupons can only do so much. Too bad there’s no clipping for “40% off your next mortgage, no strings attached!”
