Who Makes Money From Online Coupon Codes?

(Interesting Facts about Online Coupon Codes)

Everybody loves a good deal Online Coupon Codes, so much so, in fact, that online deal finding has become a big business in its own right. Humungous Japan conglomerate Rakuten spent a billion dollars to get into the cashback deal space here in the U.S. Racketed behemoths like Goldman Sachs and PayPal are snapping up sites that curate coupon codes, and even banks like Capital One are getting in on the game. And with the huge boost in online shopping during the pandemic, digital coupons surpassed paper ones for the first time ever in 2020, More than 80 percent say they’ve actively looked harder for coupons and promotions since the pandemic began. It’s no surprise that the online coupon industry is a crowded one. With nearly 2000 businesses in the daily deal site space alone, it’s filled with legitimate businesses and plenty of Fly-By-Night sites working to rise to the top of your search results without any interest in whether that promo code actually works.  when the deals are legitimate, it can mean big money for retailers, shoppers and the deals sites from honey to slick deals, Rakuten  rewards to Brad’s deals.

Online Coupon Codes
The first coupon, a word derived from a French word, meaning to cut, was mailed to consumers in 1887

The first coupon, a word derived from a French word, meaning to cut, was mailed to consumers in 1887. It offered customers a free glass of Coca-Cola, then priced at five cents if they’d come try it in a nearby pharmacy in 1989, Post created the second coupon for a penny off grape nuts.  Cereal coupons became widely used during the Great Depression and the first company devoted to coupons, Nielsen Coupon Clearinghouse, was founded in 1957. By 1997, the U.S. deemed September National Coupon Month, and by 2010, TLC had an entire show devoted to extreme couponing. The overall coupon industry declined in 2020 as people stayed home, but digital coupons were still on the rise. More than 130 years after coupons were first introduced, Digital has officially surpassed paper in more intelligence. A firm that’s been tracking coupons for 40 plus years found that even though 181 billion paper coupons were distributed in 2020 compared to just seven point five billion digital coupons, a larger percentage of redemptions came from digital coupons.

Online deals during Prime Day brought third party merchants more than three point five billion dollars of sales over just two days in 2020, up nearly 60 percent from the year before. Juniper Research estimates that digital coupon redemptions will surge to ninety one billion dollars by 2022, up from 47 billion in 2017. Big retailers like Walgreens, CVS and Target are responding with more coupons available digitally. CVS updated its app during the pandemic to include the coupons that are usually found on the back of its receipts. Walgreens stopped printing its weekly deals in June last year and says it’s seen an 80 percent increase in digital coupon redemptions target, which was the first major retailers to offer scannable mobile coupons back in 2010.

slick deals Online Coupon Codes

Now has a loyalty program that offers one percent back on every purchase. Target told CNBC its circle members have earned 200 million dollars toward future target purchases since the program launched in 2019. While staying loyal to one brand can have perks, the vast majority, 86 percent compare product prices elsewhere as they shop online.  In 2020, PayPal acquired honey for four billion dollars. Another sign it’s at the mainstream is that Honey is a sponsor of the L.A. Clippers. Although Amazon once warned users Honey’s browser extension could be a security risk, Honey says it never shares shopper data. deal sites rely on employees to find the deals, while many allow shoppers to submit promo codes. Retail me not, for instance, has more than a million users who help source the coupon codes and deals on its website, app and browser extension. Slick Deals is another huge player that relies on user generated deals, which are submitted and rated by its 12 million monthly users. Slick Deals is the most visited coupon site in the U.S. and the biggest source of outside referrals to Amazon’s marketplace. In twenty eighteen, Goldman Sachs and Hearst acquired slick deals for half a billion dollars.

The fact that huge companies like Goldman and PayPal have purchased these coupon code curators begs the question, why is this business model lucrative. Brad’s Deals sends out a daily email of deals fully curated by its employees. Others get money from online ads, and some deal sites are certainly riddled with them. But the vast majority of revenue comes from commission. Commissions range from one to three percent on low margin items like electronics, up to 10 percent on categories like home and kitchen. This makes sense for retailers because deal sites or affiliates, as they’re known in the industry, drive traffic and sales. Retailers like Proozy can appear on a deal site with or without an active partnership. But sometimes retailers bring coupon codes or info about an upcoming sale directly to the deal sites.  They can also strike exclusive deals like a three pack of Under Armour shirts that prosy sold through a Brad’s deals exclusive for $34.99.  Cruzi has seen big growth since partnering with Brad’s deals six years ago. But there are some retailers that don’t want to be featured on deal sites at all. I think Burberry, which famously burned unsold merchandise to maintain brand value.   There’s an entire industry of middlemen called affiliate marketers. One of the biggest is C.J affiliate.

It connects its 160 7000 publisher. Clients think deal sites and influencers who get a commission with more than 4000 brands or advertisers. In exchange, C.J and other affiliate marketers also get a commission from each sale. Less trustworthy sites are after that commission to. Even for legitimate businesses, tracking sales and commissions means gathering a lot of data. But across the board, all the major deal sites say the data is not sold or shared externally, but only used to better understand consumer behavior.

Data can translate into direct value for customers when there’s enough of it, Brad’s deals, for example, has more than 20 years of data on historical best prices within certain categories.  Founder Brad Wilson was shopping at his college bookstore in the early 2000s when he realized he could find much better prices on the just developing world of online retail. He plastered fliers all over campus with a breakdown of the best deals he found. Now Brad’s deals posts 120 to 150 deals per day on its site or app, emailing them out to six million users each day. CEO Jeremy Siegel says the Brad’s deal model makes the most sense for him as a retail partner.  

Caroline Campbell looks at her Brad’s deals email every day. Campbell says Brad’s is the only deal site she’s willing to use. Some of the biggest online deal sites like Rocketdyne Rewards have found success by offering direct cash, cashback or other rewards in exchange for loyalty.   Rakuten Rewards has a browser extension that can ping some of its 14 million users when cashback is available on a purchase. In the first quarter of 2021, Rakuten says one user got a single quarterly cashback check for one hundred and eight thousand dollars. The model also makes sense for its 3500 retail partners. Founded in 1998, Eberts was the first major cashback site. With Honey now owned by PayPal, which owns Venmo to one big change coming to the world of online coupons is automatic integration into payment apps. It will help you manage your daily finances with tools like budgeting and things like that, and then also shopping, discovery of of great deals and discounts and gold loyalty programs inside the PayPal wallet. And what’s next for others, slick deals and Rakuten are investing heavily in personalization, using all that data collected from each sale. Historically, slick deals was one size fits all. All the greatest deals online for everyone.  

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