Does Groupon work? The service is getting tons of new subscribers, but how many of them are actually buying the daily deals? Out of Groupon’s 115 million subscribers, only 23 million (or approximately 20%) have ever made a purchase. All Things Digital reports on Groupon’s rapidly expanding user base, purchases made via their daily deals, and average amounts spent, based on the company’s second-quarter results.
The number of Groupon subscribers has already more than doubled in 2011, up to 115 million in June from only 51 million in December of 2010. The number of merchants has skyrocketed as well – up to 135,247 through June 2011, from only 12,468 in the first half of 2010. All Things Digital attributes the subscriber growth to “aggressive marketing tactics” that have gotten many to sign up, but the real questions remains: does Groupon work for businesses? How many Groupon subscribers are actually spending via the site?
- the average Groupon subscriber spent $18 in the first half of 2011, down from $21 last year
- however, the number of Groupon subscribers rose by a whopping 1,007%; this meteoric rise in membership weighs down the average spending rate
- the average revenue per Groupon deal sold in the first half of the year was $25, up from $23 in the same period 2010
- out of those who have made a purchase on Groupon, the average user has purchased four Groupons over the lifetime of their membership (up from three in 2010)
Groupon just launched a new promotion to get more subscribers to spend: if a member buys any two Groupons by August 31, the company will give him/her $10 to spend on a future offer.
What level of growth will Groupon’s membership see in the next six months, and how many Groupon subscribers will choose to spend on daily deals? Even if the company’s “aggressive marketing” continues to pay off, will the daily deals site’s huge user base be able to maintain (or even raise) their level of engagement?
New stats from eMarketer estimate that by the end of 2011, 88.2 million Americans (nearly half the population) will have used an online coupon in the past year. This number is projected to rise to 96.8 million U.S. adults by 2013. The data clearly indicates that “digital coupon usage is now firmly a part of the online shopping experience of millions of US consumers.”
According to data from Experian Simmons, household use of digital coupons has risen from 12% in 2005 up to 22% in 2011. eMarketer reports that most online consumers that are likely to use digital coupons are already doing so; the growth rate for online coupon use will slowly decline over the next few years.
Jeffrey Grau, an eMarketer principal analyst and author of a forthcoming report on online couponing, states that “Today’s online coupon users tend to be affluent, highly educated and over the age of 55.” This information is key for marketers looking to use coupons for product promotion, and seeking the best marketing message to reach the online coupon-using demographic.
According to a new report by Morpace Omnibus, online coupons have become commonplace in the U.S. 94% of consumers are aware that they can download and print coupons from sites online, and more than two-thirds of consumers (67%) have actually done so.
Out of a list of coupon websites, three led the pack in terms of consumer awareness:
Consumers were also asked which websites they would go to when searching the internet for coupons. Coupons.com remained in the lead, but Google trailed closely behind, an impressive showing considering their lack of a platform for coupon downloads or printing:
- Coupons.com – 38%
- Google – 34%
- Groupon – 22%
Google also weighed in as the top-rated coupon site among men (41%), younger consumers age 18-34 (43%), and wealthier individuals (38%).
The report also reveals some interesting online coupon demographics:
- Women (72%) are more likely than men (59%) to download and print online coupons
- 71% of consumers with higher annual incomes ($50,000+) are likely to download and print online coupons, vs. only 61% of those with lower incomes (under $50,000)
- 97% of those age 55+ say they are aware of online coupons (a higher percentage than the overall population)
- however, those age 55+ are less aware of actual coupon sites than their younger counterparts
- Caucasian consumers report significantly higher coupon awareness than other ethnic groups (96%)
View Morpace’s Omnibus Coupon Report here.
Findings are from a survey of 1,000 consumers from Feb 10-15, 2011 as part of the Morpace Omnibus and reported by MarketingProfs.