The industry is funny.
Coupons were in vogue years ago. In the USA, companies like Retailmenot, Coupons.com, Ebates, Savings.com, FatWallet, Brad’s Deals, Coupon Cabin, amongst others, were doing very well years ago. In Canada, Red Flag Deals was the leader. These were all providing consumers with solid value.
Then came the Group Buying/Daily Deal and Flash Sale Juggernaut. These were all in vogue, generating a ridiculous amount of attention and revenue.
Now……… Coupons are back in vogue. Here’s proof:
- Retailmenot goes public in summer of 2013
- Coupons.com keeps growing
- The Daily Deals industry is going through massive growing (and not growing) pains, offering other deals besides local offers.
- The Flash sales sites are maturing into ecommerce sites instead of just delivering deals
- Now, Daily deal leaders like Groupon and Living Social and in Canada, Teambuy, have announced the launch their own Coupon service in order to compete against the likes of Retailmenot.
Yes, Groupon just launched a Coupon service similar to Retailmenot! Living Social launched it last month.
So why are Groupon and Living Social and Teambuy in Canada launching Coupon services and will they be able to compete against the likes of Retailmenot and other coupon sites.
A few thoughts:
- Groupon, Living Social and Teambuy in Canada launched Coupons because the margins are super high compared to the typical deals business. Coupon sites simply promote coupons and get paid a commission if a consumer buys from the online store. Most of the coupons are sourced from Affiliate networks like Commission Junction or Linkshare or Shareasale. Some larger sites have directly coupon relationship with larger Retailers..this leads to larger margins.
- One of the largest expenses in the daily deals business is the acquisition of sales reps. Promoting product deals and now coupons does not require the same type of sales rep investment.
- We have always stated that consumers do not care where they get their deals and coupons from or whether the industry calls offers deals or coupons. Groupon and Living Social (and in Canada Teambuy) have millions of users. Offering coupons to these users makes sense given the other local and product deals they already offer. They already have the audience, might as well monetize the audience further.
- Deal sites like Groupon are actually in a very good position to generate profit from adding Coupons. Marketing of coupons is very dependent on SEO traffic and less so on acquiring email subscribers. Groupon can now market its coupons to over 200 million subscribers. THAT is substantial and may very well cause Groupon to become a leader in the Couponing space rather quickly.
- Deal sites and coupon sites will continue to merge. In Canada, we fully expect other daily deal companies to add coupons
- Will CPG, Grocery coupons also be an avenue of growth for Groupon, Living Social or even Retailmenot? Coupons.com is very successful and Google has also entered the market with their service Zavers, however the Grocery coupons business is different than the Retail coupons sector.
- Will cash back services like Ebates or MR. Rebates or Fat wallet be adopted by Deal provider like Groupon, Living Social and others in Canada?
- Canada simply does NOT have enough inventory of Retail coupons to support what I would call hyper growth. There are plenty of coupon providers growing and launching, but not enough online retailers coming on board and making coupon promotions available. The entire industry from the coupon providers like Ebates Canada, Retailmenot Canada, Red Flag Deals, Teambuy, Saveland to Affiliate networks like Linkshare, Commission Junction, Avantlink to Shareasale to Affiliate agencies like Affiliate Traction and OPMpros to associations such as ours need to motivate online retailers in Canada to supply the market with more promotions, more deals, more coupons. This supply provide the energy for an entire ecosystem to churn out consumer demand…and it has proven to work.
Translation: The industry and media have officially reverted BACK to being coupon crazy!
PS.. Noticed I wrote “industry”. Consumers have always been coupon crazy and have never left that sector.
Look out for the following:
1. The launch of the much anticipated and updated Deals & Coupon Ecosystem Deck for 2014.. we are launching this early next week
2. Our much anticipated Research Report on the entire Deals & Coupon Industry in Canada. Let us know if you want an advanced copy.
3. Future posts and articles on Couponing in Canada; Retail coupons, Grocery (CPG) coupons, Mobile coupons, Local, etc