If the past year has taught us anything, it's that saving money has become a necessity in a less friendly economic environment ... and as a result, coupons have made a huge comeback. After all, who wants to cut back on the day-to-day essentials when (with a little extra effort) you can just get them cheaper?! Okay, I'll admit, a $4.00 latte isn't really necessary EVERY day ... but if I have a $2.00 off coupon, it sure doesn't seem like such a bad idea. Retailers clearly seem to agree as coupons (particularly the online variety) have once again become mainstream.

According to Mashable with research provided by Inmar Consumer Studies, "total coupon redemption reached 3 billion in 2009 ... What's more, the use of printable coupons, where people print online coupons and redeem them in stores, rose 308% in the first half of 2009, while 10 million digital coupons were redeemed during the same period, up 25% year-on-year."

As millions of people embrace savings in favor of debt, and coupon popularity continues to rise, we've seen a huge influx of social shopping sites. This is largely due to the popularity of social media, no doubt, but with these new community-based savings programs come huge opportunities for local retailers.

Some of the more popular sites out there include Woot.com, Thrillist.com, Gilt.com, and of course Coupons.com, but the clear winner in this latest online popularity contest appears to be Groupon.com.

Groupon is a unique online and email-based coupon service that allows participants to collectively buy discounted, local products and services. It's a brilliant system in that a minimum number of consumers must participate each day for any deal to be valid, and more importantly, it costs NOTHING for vendors or consumers to use. Groupon only retains a portion of each deal they successfully sell, so vendors looking to advertise locally can use the service at no cost. The Groupon system is locally-based - people within a specified community (determined by zip code) can sign up to receive daily deals via email that apply to products and services offered by local vendors. The deeply discounted deal-of-the-day is designed to highlight and support local businesses and engage a customer base that might otherwise shop at national-level retail chains or online.

Groupon has been tremendously successful in the markets it serves, largely because it's built on the idea of collective buying power. Participants looking for deals aggressively promote the daily coupon through social media marketing channels to help attract additional participants and secure the deal ... since a minimum number of participants are required to "validate" the daily coupon, it's up the consumers to support the discount. Every day, one local business is promoted to a group of local customers, and if the deal is attractive enough, they have the opportunity to engage a steady stream of new customers for several weeks and even months later.

In just 15 months over 3 million people have joined the daily deal service, almost 200 employees now work at Groupon, and millions of dollars are being saved and generated in the current list of 30 participating cities.

So obviously the group coupon model is working for consumers ... but how successful has it been for retailers? Is there an application for businesses or industries that haven't traditionally offered coupons?

Please post your comments - we'd love to hear about what experiences you and/or your business have had with social shopping and coupon sites!

Sara Jamieson
BIGSHOT Director of Business Development

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