It’s no secret that online coupons are exploding in popularity, especially for foodies looking to spend less on a great meal. I’ve purchased more than my fair share. And a recent study released by BlogHer even states that 51% of all women online are using coupon sites like Groupon and LivingSocial.
However, a recent New York Times article discussed whether restaurants actually benefit from the online coupon trend. It seems to be a trade-off with some establishments finding them a positive marketing tool while others claiming the discounts do not boost profits.
Let’s breakdown the different types of online coupon sites recently popular with food lovers.
Sites like Scoutmob and Blackboard Eats offer users a discount passcode to various eateries that they can access on their mobile phones and use the next time they frequent that business. There’s no pre-purchasing a certificate or gift card, involved. Blackboard Eats, however, does charge $1 for each passcode you want, or a fee of $20 for unlimited access to their discounts for one year.
Restaurant.com allows you to purchase gift certificates to a large list of pre-determined restaurants affiliated with the site, at a huge discount. Many times, you can find a discount code online for up to 80% off the listed price, which can bring a $25 gift certificate down to $5. There are many restrictions, though, and they differ with each restaurant, so it pays to read the fine print before you confirm your order.
That brings us to sites like DealPulp, TownHog, LivingSocial and Groupon, which require you to pre-pay for a largely discounted deal at a variety of different merchants, including eateries. Deals are usually 50% off or more, and have less restrictions than a certificate from Restaurant.com. Deals change daily, so you have a limited amount of time to purchase it.
There have been horror stories of some merchants being overwhelmed by the popularity of their online coupon or discount, and not being able to handle the response. But the owner of Milkshake Werks, Leslie Widmann in Redwood Shores had a great experience working with one of these sites.
“Groupon helped us set up a structure that would be good for our business. It was a great experience for us. The result was almost instant increased awareness of our business. Even folks who didn’t purchase the offer came by because they didn’t know about us. Now many of them are regulars.”
But success in the world of online coupons for a merchant doesn’t necessarily translate into dollars. It’s more about marketing.
Widmann explains, “You have to look at it in terms of effective advertising and where you’re going to spend your ad and marketing dollars. We’ve done some print ads and the effect was very subtle. The urgency and instant name recognition of a site like Groupon sparks excitement and people feel like they have to take advantage of the deal right away.”
Scoutmob’s social media manager, Nicole Jayne, has a similar theory for why online coupon sites are so successful.
“In the past, for a local small business, the only advertising options they had were billboards, radio, television and print. There was no real way to measure the success of that type of marketing. Online coupon sites allow these businesses to measure the effectiveness of getting their name out there almost instantly and translate that into traffic and revenue.”
There’s also no doubt the popularity of these sites is due in part to the recession and unstable economy. However, couponing is no flash in the pan trend, says Denise Tanton, the senior community manager at BlogHer. She, herself, recently started writing a popular series of blog posts about extreme couponing. “I started noticing couponing blogs more and thought this was a new trend. But after researching, I realized it wasn’t new, it’s just that the media has caught on because of the recession. And now TLC has latched on to it with a new show.”
She says coupons have been popular since the seventies. Even with the slowly improving economy, coupons will never go away, just evolve.
“I think we’re going to see more e-coupons, texted and mobile coupons. As smartphones become more pervasive, we’ll see more companies offering digital and smartphone based coupons. Companies will get more control over their offers that way.”
As for the money-saving food lover like me, there are three rules I live by before I hit “purchase”:
- Would I actually go to this eatery, even if I didn’t have this coupon? If I don’t answer yes, I’m out.
- Did I read the fine print? Some of these places don’t allow you to use your offer on a Friday or Saturday, have restricted times, or have expiration dates that are sooner than you’d like.
- It’s not a deal, unless you actually use it.