Do You Groupon?

In recent months, I’ve noticed the term "groupon" creeping into conversations with increasing regularity. The term comes from groupon.com, a website devoted to offering a new deal each day and built around the tagline of "collective buying power." The site is targeted to various cities across the country, and each day features a steep discount at a local establishment. In order for the groupon to be activated for that day, a certain number of people must join the deal. Once that number is reached, the deal is on and everyone who signed up receives the Groupon coupon by email.

By taking a look at traffic to groupon.com over the past several months, I realized I’m not the only one hearing about this site more frequently.  Launched just about a year ago, traffic to the site has multiplied dramatically each month. From June 2009 to January 2010, the number of monthly visitors went from 26,000 to over 2.1 million"”a whopping 5000% increase.  Not only are more visitors coming to the site each month, but those visitors are also becoming increasingly engaged. Over the same period of time (June 2009 to January 2010), people went from making an average of 1.4 visits per month to 2.5 visits per month.

So where are all of these visitors coming from? Groupon’s referring traffic represents both the word-of-mouth nature of the site, as well as its basis in the online community. Facebook and Twitter were the top referring sites in January, with Facebook comprising 44% of all referrals and Twitter 8%. Based on the order of the top referring sites, Groupon’s traffic relies less heavily on search than on the power of social media, as Google and Yahoo take the third and fourth spots on the list. Over the past several months, the amount of overall visits coming from search has hovered steadily around 3%.

Part of Groupon’s overwhelming growth over the past several months can be attributed to its expansion across the country. Originally launched in Chicago, the site then rolled out to other cities across the United States. According to traffic data, Groupon remains most popular in Chicago, with Boston, New York, DC, and Atlanta rounding out the top five.

As might be expected of a site with the bulk of its traffic coming from Facebook and Twitter, Groupon users are typically younger. From a look at Groupon’s demographic data, only 11% are over 55, while over a third of visitors are under 35.  In addition to being younger, Groupon users are primarily female"”nearly 70% of visitors in January were women.

Based on the trend so far, it seems that traffic will only continue to increase as Groupon gains even more exposure.  Consumers stand to benefit from its popularity as more and more companies put deals on the site, and as similar sites capitalize on the "collective buying power" model and offer additional daily discounts.

About Lindsay Steinbach:
Lindsay Steinbach is an Associate in Retail and Consumer Products at Compete. Lindsay is responsible for data mining and providing analysis for a wide rang of retail and CPG clients. Before Lindsay joined the Compete team she was a student at Dartmouth College. Connect with Lindsay on LinkedIn