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Are online discount vouchers on the decline?
July 01, 2009
As we’ve reported a number of times, online vouchers have been one of the recent online success stories. Voucher searches shot up massively in the run up to Christmas as savvy shoppers looked to find a bargain during the recession. But recently we’ve heard some talk that the boom times for discount vouchers may be coming to an end. This begs the question: are consumers and retailers tiring of discount vouchers? To test this hypothesis, I charted searches for the term ‘vouchers’ over the last two years.
As you would expect, there has been a significant decline since Christmas; but last week (w/e 27/06/09) searches for ‘vouchers’ were also down 28.6% on the equivalent week last year (28/06/08). So voucher searches are down? Not so fast – the above chart only includes searches for the single term ‘vouchers’. Over 96% of UK searches containing the word ‘vouchers’ are for a longer term (e.g. ‘discount vouchers’, ‘tesco vouchers’, etc.) rather than just the single word ‘vouchers’, so it important to consider the broader picture. The chart below tracks the breadth of searches for the term ‘vouchers’ – i.e. the number of search terms in the UK that contained the term ‘voucher’.
The breadth of searches for ‘voucher’ has also declined since Christmas, but in this case it is still up year-on-year. This data points to an increasingly sophisticated voucher-searching audience. Now that people are used to looking for vouchers online, they are searching for specific discounts rather than more generic terms. Certainly, the rate of increase in voucher searches has flattened – it is now starting to look more like a mature than a growing market.
The final piece of the puzzle is to look at traffic to voucher specific websites (such as Hot UK Deals, Money Saving Expert and My Voucher Codes). As the chart below illustrates, this has flattened since Christmas and is actually down 12.1% on last year. However, from the retailers’ perspective, voucher sites are sending more traffic now than a year ago. During May 2009 the top voucher websites accounted 0.53% of all upstream traffic to the Shopping and Classifieds industry. This was down from the peak of 0.82% during December, but up from 0.43% in May 2008.
So, in conclusion: the online voucher market is still huge and voucher sites are sending a significant amount of traffic to retailers. But the market is maturing fast and is no longer growing at the rate it once was.
Posted by Robin Goad at 12:50 PM
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In Categories Economy | Retail | Search | Shopping and Classifieds
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Comments
I think consumers are somewhat tired of vouchers - the Internet has too much static on it for folks to use it for this kind of thing.
Posted by AMH | July 1, 2009 08:47 PM
Have you any analysis on the trend of voucher code redemption from companies who have a strong affinity with it's customer base, rather than open market vouchers?
Many thanks
Richard
Posted by Richard Williams | July 2, 2009 02:47 PM
I think it's coming to an end. John Lewis is excluding voucher code sites from their affiliation. Whoot!
Publisher's are constantly bombarded with emails about new and changes to voucher codes and dates. It's a job in itself. On the whole 95% of the vouchers I see are generally not worth promoting.
Andy
www.gamestock.co.uk
Posted by Andy | July 2, 2009 06:00 PM
I think they are passed their sell by date.
I have spoken to some social shopping sites (http://www.tribesmart.com and http://www.thisnext.com) who both said that they have noticed usage of discount codes declining.
That said I think sites like this New Zealand site will become more popular http://www.1-day.co.nz
Posted by Sean Percy | July 6, 2009 07:48 PM
To go a tad Mark Twain, I would say that any reports of the death of voucher codes are an "exaggeration”. They remain solid it what they offer to both the customer and to the merchant. The merchant can keep their cashflow moving along and clear excess stock quickly. Whilst the voucher codes user gets a discount and therefore saves money. The debate as to the added value of voucher has some merit. But here we should not overlook the importance of customer retention. Equally, we should see users of voucher codes (and cashback) as a target market. If one retailer chooses not to use them then another retailer who does may pick up the business. All in all, I don’t see the demise of voucher codes anytime soon…
Posted by Ed Hall, Director of Voucher Codes site, VoucherSeeker | July 7, 2009 11:38 AM
There's definately fatigue amongst consumers, and these sites seem to be decreasing in popularity.
From a personal point of view there never seems to be any valid vouchers out there, and a lot of sites target search engines with pages that dont even contain a working voucher. The bounce rate for some of the voucher sites must be astronomical.
Posted by Al Mackin | July 7, 2009 07:55 PM
I disagree that the popularity of these sites is declining. I use them every time i shop online, why would I want to pay more? Most of my friends who shop online also use something like this. It's interesting to see that those who seem to think that online vouchers are on the decline seem to have competing or rival business interests online. The gamestock guy for example, but hey, if you can give me something better, prove me wrong. I'm pretty happy getting a discount for now.
Posted by mike | July 10, 2009 11:42 PM
I have noticed that many consumers do not use voucher codes despite voucher codes being displayed at point of price comparison.
There are end users that don't understand vouchers. This is the real reason why vouchers exist - to segment the demand curve in to customers wishing to pay a higher price to those that always want a better deal.
Posted by richard101 | July 28, 2009 04:52 PM
On the evidence of recent voucher code promotions from two of our more successful e-commerce sites (http://www.rutlands.co.uk/ and http://www.theenglishshavingcompany.com/), the potential impact of a well-planned voucher code offer is very much alive and kicking!
However, in fairness, I've noted in both recent examples, the merchant has increased the "value" of the voucher (e.g. an order discount AND free shipping in the case of Rutlands) - so perhaps this has disguised an actual decline in the use of such "coupons"...?
Interesting article, thanks for posting it.
John.
Posted by John Mounsey | July 29, 2009 09:43 AM
I totally agree with what Ed Wall said "I would say that any reports of the death of voucher codes are an "exaggeration”."!
Posted by Discount Vouchers | July 31, 2009 04:55 AM
Well has anyone forgotten we're amongst a economic downturn in spending. It would make sense that spending all whether online or in your local store would be on the decline. Online vouchers are definitely not dying. Its also obvious by the graphs that they are subject to seasonal fluctuations.
Over the long run, I would say the graphs suggest there is a positive growth. Not a decline.
Posted by Tjoos online vouchers | August 13, 2009 03:27 AM
It's normal for voucher trends to drop at the moment. It's just like forex and other business cycle. Wait for next year or at peak season. I believe that the chart will go up.
Posted by Free Samples By mail | October 8, 2009 07:58 PM
The user is getting more sophisticated, but checkout the terms discount codes, voucher codes as these are more specific to the internet.
Also sites like www.promotions.co.uk have created a market for companies to utilise there existing traffic and send to a related merchant, hence removing the need for a user to ever go to and search for a discount code site.
Regards
Doug Scott
www.promotions.co.uk
Posted by Doug Scott | July 1, 2009 08:03 PM