E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
That’s because of high traffic and consumer loyalty.
When it comes to affiliate marketing, coupon sites have proven far more valuable than content and comparison shopping sites for Bake Me a Wish, an online retailer of cookies, cakes and brownies, says says Joseph Dornoff, the merchant’s vice president of marketing and operations.
“Comparison shopping engines may put products side by side and may also be a lead-in for the customer, but it rarely finalizes a sale with the degree of efficacy that a coupon site provides,” he says. “We also tend to see a lot of loyalty to coupon sites. If a consumer buys through, for example, Coupon Cabin once, it’s likely she’ll buy from it again.”
Affiliate marketing is on the rise, according to a report earlier this year from from Forrester Consulting and affiliate network operator Rakuten LinkShare Corp. that says retailer spending on affiliate marketing will increase to $4.47 billion in 2016, more than double the $2.08 billion spent in 2011.
While affiliate marketing ads appear on a variety of sites—including blogs that discuss and recommend products, and then receive a cut of any sale that originates there—retailers find it hard to ignore coupon, discount code and comparison shopping sites that can also offer coupons and discount codes. After all, the top 20 such sites attracted nearly 740 million U.S. visits in September, according to online marketing research firm Experian Hitwise. That compares with just over 2 billion total U.S. visits in September for the top 500 retail sites.
Still, some e-retailers are less than enamored of coupon sites. About a year-and-a-half ago, Spreadshirt.com, which sells customized apparel, kicked coupon sites out of its affiliate program, says marketing director Hugo Smoter. It had found that most of the commissions charged by affiliate networks were for sales that stemmed from coupon sites—and that shoppers would search for those sites and their discount codes after figuring out what they wanted to buy from Spreadshirt, meaning the coupon sites were hardly doing enough work to justify their commissions. “We were cannibalizing and inflating the price of our own sales,” Smoter says.
Since then, Spreadshirt.com has created on its own e-commerce site a coupon page that not only offers the discounts that many shoppers have come to expect, but which appears on both paid and natural search results pages when consumers search for Spreadshirt coupons. “It has saved us a lot of money and commission,” says Smoter.
For much more about the rise of affiliate marketing and how retailers are responding, check out the upcoming November issue of Internet Retailer magazine.