The onset of the Great Recession happened to coincide with the emergence of the smartphone. Consumers needing to save money suddenly had an easier way to do it, with online coupons and deals. Being able to access the deals on the go suddenly made online coupons more than a novelty – they became a new and significant force in commerce.
The economy is recovering but digital coupons' use continues to grow. The trade publication eMarketer estimates more than 92.5 million people in the U.S. redeemed a digital coupon in 2012. By 2014, the company predicts U.S. adult digital coupon users will surpass 100 million.
According to the estimates, growth will come in at 4.6% this year and will remain steady through 2014. The number of users who access coupons using desktop computers is nearing maturity, but mobile coupon users — especially those who redeem via smartphones — are helping to boost overall growth.
Deals on the go
Besides being mobile, smartphones allow users to receive deals that are relevant to where they happen to be. A number of sites have used this ability to collect and distribute coupons and deals that are targeted and local.
Groupon and Living Social made big splashes at the beginning of the trend but have since found it tough sledding as bigger competitors, like eBay and Amazon, jumped in, suggesting the daily deals aspect of digital discounts might not have legs.
Taking a different track is 8coupons, which presents users with offers gleaned from other coupon and deal sites. Founder and CEO Landy Ung says users will find savings on a wide variety of products and services, everything from Halloween costumes to travel, all geared to where they happen to be.
“Right now I'm eyeing a deal from Living Social for New Years Eve 2014 in Dubai,” Ung said. “And I just recently purchased a Groupon offer of a trip to Turkey over the Thanksgiving holidays. So I'll be in Turkey during turkey day.”
Getting hundreds to thousands of dollars off international travel tends to draw a whole new breed of consumer to coupons. While paper coupons were once mostly used by consumers just trying to stretch their food budgets a bit, online coupons – particularly mobile ones – tend to draw younger and more affluent consumers.
Affluent consumers like to save too
Even as early as 2010 Nielsen found that 38% of “super heavy” users and 41% of “enthusiasts” came from households with incomes greater than $70,000. Households with income of $100,000 and up were the primary drivers of coupon growth in 2009, the company found. The enthusiast category also attracts a disproportionate number of households with incomes between $50,000 and $69,900.
Some speculate part of the digital coupon appeal – especially mobile coupons – is the delivery system and the way they can be integrated into an urban lifestyle. That may be true but Ung says the deals are pretty good too.
“Most of the deals are, on average 40% to 50%, maybe even 60% off,” she said. “Currently we don't have any small, 50-cents-off kinds of discounts you might kind in a newspaper coupon. It's really a very comprehensive discovery and shopping comparison engine for deals.”
Shortcut to bargains
And while you might not find a coupon for a new car, Ung said 8coupons users had access to a deal for thousands off on a wedding, which she notes is usually more expensive than a car. While there are many deal sites out there – and more being launched all the time – Ung said 8coupons can be a shortcut for consumers to find the best bargains.
“Instead of working with the merchants themselves we work with partners like Living Social, Groupon, Restaurant.com, Amazon and eBay to deliver to our users the best deals.”
Finally, demographics may be driving online coupon growth. Digital coupon website RetailMeNot issued a report in early September showing the 18-34 age group is much more likely to use digital coupons than consumers over 35. And 18-34 year olds are three times more likely to use a mobile coupon.
The survey also suggests consumers don't demand huge savings in order to consider an offer to be a “good deal.” Nearly half of those surveyed ranked offers of 25% off – and even less – to be “good deals.”