The Maniacally Offline Business of Coupon-Cutting Sees Digital Growth

There are some things that you just never think will go online, like the art of clipping, saving and redeeming coupons.

In 13 years of trying to bring the Depression-era business into the 21st century, Coupons.com CEO Steven Boal had his doubts along the way,  but “lo and behold, it’s actually happening,” he said.

There have been a lot of challenges–like wrestling those scissors out of the hands of senior citizens.

But you take America’s deal-oriented culture and put it together with today’s digital media, and you get things like Groupon and Coupons.com. “It’s an explosive opportunity,” he said.

However, digital coupons today are still pretty physical.

On Coupons.com, you can find them online and print them out, or potentially save them to the loyalty card that gets swiped at checkout. Some of that is changing with mobile phones, but that’s still in its infancy.

What is changing with digital coupons is the frequency of use and the demographics.

Now, 40 percent of Coupons.com’s customers are male, and there’s a wider variety of products being purchased, Boal said. That’s leading to soaring redemption rates. Of the people who visit the Coupons.com network, 17 percent actually use a coupon, which is much higher than the newspaper average of half a percent.

As for the progress of the business, Boal said it started to scale about three years ago, “and this past year was the first time we had visibility into extreme growth into 2011. We hit the gates running, and the 2011 numbers are smoking hot off the charts,” he said. “The lines are going vertical right now.”

Last year, more than 49 million U.S. consumers used online coupons, representing more than 16 percent of the population, and of those coupon users, almost one-third did not also clip coupons from their newspaper, according to Simmons Market Research.

Coupons.com said that last year, total consumer savings from its network, which also includes other Web sites using its technology, equaled more than $1.2 billion in coupon savings, a 41 percent jump year-over-year.

Coupons.com is the 63rd largest Web property in the U.S. (coming in one spot above Groupon and one below Expedia), with just more than 14.7 million monthly uniques.

In 2010, Coupons.com grew to more than 270 employees and expects to hire an additional 100 people this year, mostly in engineering, sales and marketing in the U.S. and international markets.

Here’s a chart of the top 20 most frugal cities, according to Coupons.com:


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