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More Signs of A Stressed Consumer? Digital Coupon Use Surges

Are consumers getting more stressed?

Steven Boal, CEO Of Coupons.com, thinks they are. Despite reports of rising consumer confidence, factors such as rapidly increasing gasoline prices and high unemployment are continuing to put pressure on consumers, according to Boal.

AP

"Consumers are still feeling the pinch, from our view," Boal says.

Want more proof? Use of digital coupons surged from April to May, according to ComScore reports. What's more, June looks to be shaping up to show another solid month of growth for Coupons.com, the leading digital coupon Web site, Boal says.

Digital coupon Web sites saw the largest increase in unique visitors, a key measure of Internet traffic, from April to May of any Web site category, says Andrew Lipsman, director of Industry Analysis at ComScore.

The growth in unique visitors at Coupons.com rose 85 percent during that period, solidly outpacing the 19 percent growth in the overall category, according to ComScore.

It's notable, that at the same time, online commerce weakened, Lipsman says. Since the start of this year, sales of products online had been basically been flat with year ago levels, but the value of those purchases in May fell from a year ago, according to ComScore data.

"We've started to notice that there's a relationship between gas prices and ecommerce," Lipsman says. He adds: "People's expectations for the future are better, but they still don't have the same dollars to spend."

Coupons.com, which provides coupons for online shopping sites as well for traditional "brick and mortar" stores, restaurants and other services, has been seeing a jump in its traffic each time the consumer's stress level rises.

This has been good news for Coupons.com's business. Shoppers come in to use the digital coupons in an effort to stretch their dollars as far as possible, and even when the pressure eases, those users tend to keep coming back, according to Boal.

"It's a learned behavior," Boal says, noting that the use of traditional coupons distributed by newspaper inserts became popular during the Great Depression.

In the past five months, the total amount of savings printed on its digital coupon network has surpassed the value printed in all of 2008. Comparing the same five-month period, year-over-year, shows an increase of more than 212 percent.

In addition, more of those coupons are being redeemed. About 20 percent of the coupons printed from the site are now redeemed, compared with a rate of about 9 percent when the site first launched.

This statistic is even more impressive when one considers that less than one percent of traditional coupons are redeemed.

Still, the consumer's state of mind isn't the only thing driving Coupons.com's traffic. The company has been taking important steps to boost its business, including a test of television marketing in some regions.

Boal wouldn't disclose where the test markets are, but he said the company is continuing to expand them and plans to expand the effort later this year. These tests were a key driver of the increase in unique visitors to the site, he says.

Coupons.com also is using Twitter feeds, Facebook applications and alliances with companies such as Hewlett-Packard to help continue the momentum in its business, according to Boal.

The deal with HP, which was announced Monday, makes it easy for consumers to print out coupons from certain models of HP printers without even being connected to a PC.

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Questions? Comments? Email us at consumernation@cnbc.com

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