Industry Insights
April 2024
by GSG

Exploring The Unseen Value of Coupon Sites in Ecommerce: The Impact on AOVs and Contribution Margins

The impact of coupon sites in the world of ecommerce is sometimes misunderstood. Some argue that coupons gnaw away at profit margins and can risk devaluing a brand. For others, they offer a pathway to reach a new audience and generate additional sales, and play an important role in their marketing. Probably the most common misconceptions about coupon sites is that they negatively impact profit margins (which we refer to as contribution margin in this article), and that the sales they generate would have happened anyway. We decided to see if the data supports these assumptions or if it tells a different story.

In this article, we’ll summarise our findings. You’ll find the full insights in our white paper, The Counter-Intuitive Impact Coupon Sites Can Have on Contribution Margin.

Impact on Average Order Values (AOVs)

Contrary to what one might expect, it turns out that customers who use coupons often end up spending more, not less. Global Savings Group (GSG) internal data showed that AOVs are up to 122% higher for online shoppers coming from a GSG coupon site compared to the average shopper shopping directly at the same retailer’s website. Data from affiliate network Awin supports our findings, with purchases including a coupon on average 54% higher than those without one.

So, AOVs might be higher, but what about contribution margins? After all, working with coupon sites can bring additional costs, such as the commission paid for each sale they generate. Well, it turns out that the contribution margin per purchase is still higher for coupon site users than it is for the average buyer (based on our calculations). Why? Because the higher AOV offsets the impact of the discount and commission paid to the coupon site. These increased order values counterbalance the coupon discount, leading to higher profitability for retailers.

contribution margin

Drive new sales in a targeted way

A growing percentage of online shoppers search for discounts as part of their shopping experience, with 32% of people searching for coupons every single time they make a purchase online. Our white paper highlights how coupon site platforms are particularly effective at targeting price-sensitive consumers; by working with reputable coupon sites, you can ensure customers looking for coupons have a good experience, while not impacting profit margins on customers who don’t search for them. If, on the other hand, you decide to show coupons directly on your site to all customers, even those customers who would have bought at full price will likely use them.

On top of that, coupon sites will typically drive new customers at a lower acquisition cost than other major marketing channels such as Google Ads and Facebook. Coupon sites operate on a cost-per-action basis where you only pay for conversions, and not for clicks or impressions. This means that coupon sites often drive higher return on investment (ROI) than traditional advertising channels such as Amazon, Google, or Meta.

Reduce cart abandonment

Did you know that the average cart abandonment rate stands at over 70%? Why is this? Consumers are motivated to shop online but often lack the incentive to complete their purchases, as well as having myriad options to shop with competitors or search for cheaper alternatives. Working with coupon sites can provide a crucial incentive for online shoppers to complete their purchases.

Interestingly, data from affiliate network CJ found that shopping journeys that included a visit to a coupon site saw a conversion rate lift of a staggering 152.4%. Data from Global Savings Group supports these findings; in one case, a campaign we ran with an advertiser that included an exclusive discount code delivered a conversion rate lift of 180%. By increasing your conversion rate, your overall marketing efforts become more efficient and ROI can increase significantly.

Bringing it together… 

Despite the criticism of coupon sites in some circles, data shows they provide clear opportunities for retailers to attract new audiences and reduce cart abandonment rates. What’s more, they play a much more nuanced role in driving value beyond simply generating sales; the impact they can have on AOVs can help to offset any perceived costs associated with them.

In this article we’ve only briefly covered the topic and insights we discovered, so for the full scoop on’t forget to read the full white paper on the topic.

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