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?