15
2011
Will social shopping spell the end of discount voucher sites?
Have online discount vouchers had their day? A couple of years ago a lot of industries relied on discount vouchers in order to get them through the recession. The “credit crunch lunch” kept consumers walking through the doors of high street restaurant chains with the promises of Buy One Get One Free meals, but recently searches for vouchers online have dipped, replaced by a new trend of social shopping.
Looking at variations of all search terms which contain the word ‘voucher’ you can see that historically there are peaks in the run up to Christmas. Recent trends show that searches for vouchers are starting to dip however. Comparing December 2010 to December 2009 there was a 7% decrease in search volume for all terms relating to vouchers.
Taking the most recent data into account, search variations for vouchers in the 4 rolling weeks ending 12 March 2011 were 3% down on the same period in 2010. This change in search trends could be explained by the fact that consumers are more aware of brands within this sector, such as HotUKDeals, the UK’s most visited discount voucher site.
In this case it’s possible that UK Internet users have stopped searching for generic terms such as ‘vouchers’ and instead have started searching for brands like ‘hotukdeals’. Internet users are also visiting retail websites directly for vouchers, with Dominos, Pizza Hut and Pizza Express the top three recipients of traffic from voucher searches.
Overall, however, visits to dedicated voucher sites are down on previous years. Between December 2009 and December 2010 visits to voucher sites declined by 20%.
The new emerging trend in the retail sector is for social shopping. I’ve mentioned in previous blogs how social media is being used by companies to engage with their customers and boost brand awareness. However, the growth of Groupon UK is the real indicator that social shopping is taking off.
Since September 2010 visits to the Groupon UK website have increased by 540%. Last week Groupon UK was the 14th biggest website in our Shopping and Classifieds category, beating HotUKDeals for the first time and finishing ahead of big brand names such as Debenhams, B&Q and ASDA. Groupon UK is now the biggest website in the Rewards and Directory category, which represents remarkable growth for a website which has only been competing in the UK marketplace for one year.
Discount vouchers are by no means dead; in February 2011 voucher sites accounted for 27% of all visits to Rewards and Directories sites. However as the graph below shows Social Shopping is definitely in the ascendancy, overtaking cashback sites and rapidly catching on vouchers. Price comparison sites still account for over 50% of the market, but they have been squeezed by other players including the social sites.
Social shopping is definitely a growing trend for retail in 2011. Whilst it may not be the death of voucher sites just yet, it is certainly a strong competitor in the market.
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As the owner of a voucher code website, this information is certainly relevant to me.
The growth of social is an obvious one, but it’s the sharp decline in price comparison that really stands out in the points that have been raised.
The growth of our discount voucher website has been down since last year, but it’s more to do with the number of competitors that anything else. A recent update to our site design, and functionality, will go a long way to fixing this but we have been involved with voucher code websites since 2003 and luckily don’t have all our eggs in one basket…
We run a computer price comparison site and have been including voucher codes within our site to stop our users having to go elsewhere for nearly 12 months now.
I know a lot of others in our sector have been doing the same but I would agree Groupon and the next wave of “social” shopping sites are going to make the sector even more competitive so we will all need to keep improving our user experience.
If the traffic stats are down, it doesn’t necessarily mean a reduction in consumer interest in vouchers – more likely as you say, it’s a swing to aggregator sites, and compounded by the increase in channels of distribution for voucher codes.
Smartphone applications like VoucherCloud keep users in the app environment and aren’t recorded in search or site traffic. Mobile vouchers via SMS and subscription emails that don’t drive traffic to sites but include vouchers in text are also frequently used.
As the founder of http://www.discountvouchers.co.uk this information is interesting, but it does not seem to be hitting us in any form. Our growth may not have been as spectacular as Groupons but in 18 months we have grown to do over 1000 sales per day via partners.
We love the impact that Groupon is having on the market as it is making more merchants understand the discount voucher space.
Doug Scott
Thanks for all your comments, I’m glad you liked the blog. It’s interesting that Groupon appears to be having a positive effect for you Doug rather than being a direct competitor for your traffic.
As I said in the blog though, vouchers are certainly not dead, but neither are they increasing growth. I think that as this market evolves companies will have to rely on social networks more in order to secure engagement and continued sales. It will be interesting to see how the numbers stack up in 6-12 months time.
Please keep coming back and keep reading for the latest updates.
Given that voucher websites insist in the subscription model, most of the information now comes to them rather than users having to go and find it. Surely this affects the search stats? It’s interesting though when so many magazines and other media companies are branching out into the voucher model as an alternative business model…
Surely browser shopping addons such as http://boo.ly already spell the end for coupon sites? In fact there’s now even an IE and Chrome version of Booly to accompany the Firebox addon.
Where is moneysavingexpert’s forum? It has 13,000 plus posts of crowd sourced double the difference Tesco vouchers that none of the commercial voucher websites that you track can publish and that’s just one referral free forum voucher thread of thousands. Doesn’t that make it the UK’s biggest voucher website?
Just to pick up on some of the latest comments:
Clare – you’re right that search stats will be affected because of the subscription model. However, a lot of emails will encourage users to click through to the voucher sites, so that doesn’t explain why visits to voucher sites have dropped off. As I mentioned before this is more likely because people are going directly to retailers for vouchers.
Donna – addons like boo.ly are still very much in their infancy online. Although they are growing in popularity they barely register in our data, accounting for a tiny fraction of browsing behaviour. This may change but for now they are not a threat to the voucher industry.
With regards to Moneysavingexpert, we do include them in our Rewards and Directories category but HotUKDeals is still bigger than Moneysavingexpert in terms of UK Internet visits, making it the UK’s most popular voucher site.
Thanks all for your thoughts, keep them coming.
Robin.