In a surprise move, paid voucher site GrabOne has recently introduced Free Coupons to their site. While most people are used to going to GrabOne and whipping out their credit cards, they can now browse a bunch of deals and download coupons for free.
Free is exciting, but what is even more exciting is that the vouchers are for major brands like McDonalds, Rebel Sport, Repco and Hallensteins. There are over 50 well known brands, offering hundreds of vouchers. The vouchers will change often, and most vouchers it seems, are valid for a week.
There is no cost, just simply download and print. Easy. You don't even need to enter your email. You can also use them on your phone, and show the coupons to retail staff.
Free coupon sites are booming overseas. RetailMeNot.com is one of the market leaders in the US, and GrabOne must have been watching the international coupon space for trends.
Why would GrabOne do it?
It does seem strange that GrabOne would potentially threaten their lucrative prepaid vouchers business by offering free coupons. However the benefits must be outweighing the risks.
They must have thought long and hard about this, because it seems strange they would threaten their own revenue. Cannibalisation will have been their main concern, daily deal buyers, opting instead for free coupons.
GrabOne not only gets credibility from partnering with larger brands, but they get the repeat aspect of people coming back to print off more McDonalds vouchers. Win, Win, Win.
The benefits we can see for offering free coupons alongside vouchers:
- More traffic (always good)
- More people using the site and getting in the habit of checking it daily
- Bringing voucher browsers in who might end up buying daily deal vouchers
- Gaining new customers who don't buy online
- Repeat aspect of voucher printers coming back often
- New customers who don't have a credit card
- New customers who don't like the impulse buying aspect of daily deals
- Bringing back customers who may have forgotten about GrabOne
- Enticing back customers who may have had a bad experience with a merchant
- By partnering with major brands it takes away the stigma of mostly unknown businesses running deals on GrabOne. Gives even more credibility to GrabOne
The potential benefits to GrabOne are actually endless.
Daily Deals have of course lost their popularity somewhat. They are still a big way for people to save money, but after the hype of 2011, 2012 they have settled down to a more consistent growth level.
Pair the drop in popularity with email use dropping. More people are using Facebook as their primary communication tool, its getting harder to get commercial messages to people's inboxs.
Most people have worked out that they can unsubscribe from daily emails and just go to the site in question to check for deals. And of course smart people use aggregators like OneDayDeals to find deals from multiple sites on one page :)
Businesses have been offering coupons for years, I mean we've all used McDonalds vouchers, they been around for decades. Offering coupons online is a more efficient way to distribute them than putting them on the back of shopping receipts, or posting them.
Junk mail is a true waste of trees - you should go to a P.O. Box lobby on leaflet day, they have special bins outside that you just dump your junk mail in. A complete waste of resources.
The fact that the GrabOne voucher site is self service means that you can select and print voucher you actually want, rather than the mixed bag of shopping receipts or junk mail coupons.
The good thing for GrabOne is they are owned by a newspaper, so they have access to major businesses, well known brand names that spend money on advertising. The bigger brands GrabOne gets on board, the more popular their free coupons section will be.
Online coupons are a massive trend in the US now with thousands of voucher sites popping up. They must have been worried about overseas sites coming in. Or a kiwi site getting more of a foothold. Starting a free coupon site has a very small barrier to entry. Anyone can do it. But it comes done to having big brand name vouchers.
While there are many free coupons sites in New Zealand, they aren't that well known. Can you name any? The largest would have to be EzyCoupons.co.nz. They have been running for many years, and they are part of the company that started those vouchers on the back of supermarket receipts.
There is also VoucherMate.co.nz that was popular a few years ago. They still seem to be running, but you don't hear much from them anymore. They were run in conjunction with radio stations so had a good way to get the word out about the site.
GrabOne will be hoping their household name will put a new spotlight on the free online coupons market that really is still underground in New Zealand. Having GrabOne as the one stop shop for most coupons is a great move.
But at the end of the day, offering free coupons is not anywhere as lucrative as paid vouchers. So this is a sign that growth is slowing at GrabOne. Sure they will still be growing at a nice rate, but not like the fast growth of the past. But when you've sold over 9 million coupons in a country of only 4 million people you start to hit growth barriers.
Coupons are really an icing on the cake. It's more traffic that they hope will convert to more more sales, and more word of mouth. It's funny, the free coupons section actually seem to have more well known brands offering deals than the paid voucher side.
A big reason to launch free coupons now is probably to heed off RetailMeNot.com and other coupon sites from trying to get a foot hold here. If there is one risk to the daily deal model, it's free coupons online which have the potential to offer very similar savings.
So by owning the free coupon market as well, they get a large pool of shoppers to cross market across platforms to. It's better to have an online customer get something from you, over another site, even if it is free. Word of mouth and the viral nature of some deals still reins supreme online.
Free Coupons are better for customers
The good thing about self service free coupons is that you don't need to be emailed. You can simply come to the site anytime and you'll find some great deals. No pesky daily email necessary.
Some people hate being rushed into buying online. The countdown timer, and fine print mean that some people just throw their hands up when buying daily deals. Free coupons take away the time pressure, and the risk of wasting money. Buyer's remorse after purchasing a voucher is non-existent obviously.
There are some who won't buy prepaid vouchers online. They've had personal experience from a deal gone wrong, or they just don't want to take the risk. When you buy a deal online you have committed, and given money without being able to judge that you are going to get value for money. It's very trusting, especially when you have never heard of the merchant before. Many people don't like this aspect of daily deals.
We've all been 'burned' by buying a voucher that ended up with poor service or we misread the deal terms in the rush. A bad experience can put you off buying vouchers again. If you decide after printing your free voucher that you don't want it, you can just throw or give it away. You can also read the deal properly once it's printed off and in physical form. No hard to see links to click to read terms and conditions.
And of course there is still a segment of the population who doesn't buy online. It's not just old people. Many people don't like spending money on things they can't touch. Coupons are known by everyone, so this opens up the GrabOne site to even more people.
Many people these days don't have credit cards. They may not like owing money, they may have a bad credit rating. They may have simply cut up their credit cards. Many people use cash and EFTPOS only, so they have not been able to use GrabOne in the past.
Free Coupons are better for businesses
Everybody knows and understands coupons. So there is less chance for friction when it comes time to redeem the coupon.
Many businesses are scared of running daily deals. When you pre-sell something, you have the obligation to deliver it. When customers have prepaid and they don't like something when they come to redeem it, they can get a little edgy, as their know they have taken a risk.
If people have prepaid, there is another dimension to the transaction. Many many issues pop up when people redeem their vouchers. Prepaid vouchers can be a hassle. People can lose them. They try to get better deals. People don't read the rules of the deal. Deal terms get lost in translation.
With coupons, the deals are normally pretty simple and clear. Because pre-paid money isn't involved, there is very little fine print. With a free coupon, if a customer is not happy they can walk away.
A customer can refuse to use a voucher, and a business can potentially refuse to honour a voucher. There is less risk for both the buyer and the seller when a coupon is free.
Probably the best reason for businesses to use free coupons over daily deals is that they keep more of the pie. Most businesses who run deals end up with just 25% of the cost of the sale. This usually means they are not getting 75% of the normal price.
Many businesses refuse to offer daily deals because they will lose money on them. They may refuse to pay a hefty commission to another company when they could simply offer their own 50% off deal.
With no commission on free vouchers, businesses can keep 50-75% of the sale, not a tiny 25%. It's a lot better for businesses overall. Businesses can also manage vouchers themselves. They can come up with new deals on the spot, and even pull a voucher when it is no longer working for them. This is very hard with prepaid vouchers, as there is money involved.
Prepaid have long expiry dates whereas GrabOne free coupons expire usually within a week. If a deal isn't working (i.e. you are losing money on it) you can pull it off the site, and only have a week of redemptions come in.
Offering Free Coupons is a great idea for all involved
The ability to offer coupons attracts major brands who may never have wanted or needed to run a grab one deal. Businesses design their own deals, which suits larger companies, many of which already offer coupons through their own marketing efforts.
For businesses, offering coupons online through a major site is no doubt a cheaper way to get coupons out than posting them. Self service coupons are more effective, and have an exponentially higher use rate. Money saved, trees saved. Customers love free coupons. There is no risk to them, and very little risk to the business.
Overall, seeing the market leader in daily deals starting to offer free coupons signals a big shift in the daily deal industry. It definitely going to be very hard for those existing voucher sites to compete. It will also be interesting to see if the other sites like TreatMe and Groupon follow suit.
The free coupons could also just be a trial thing. GrabOne are all about data and watching trends. If it started to affect their revenue then of course they would stop it.
For this reason, the onus is on the public to make their free coupons work. The worst thing we can do is be complacent and think, oh the vouchers are self service, they are always there now. You need to make use of them!
Vouchers all have codes and retailers know where their voucher redemptions are coming from. So if they aren't working they may pull their vouchers from GrabOne. Savings lost!
So get out there and use the vouchers. Give them a try today, and let's make the free coupons program a success - it beats paying for them :)