A Digital Makeover for Grocery Store Coupons
SavingStar
Tom Murray (left), David Rochon
David Rochon started his career in groceries at the age of 17, packing shelves at a Brockton Public Markets in Hanson, Mass., in 1973. Over the decades that followed, he went from deli and dairy manager to an executive at grocery-marketer Catalina Marketing, and then to president of Upromise, a college saving service that allows shoppers to apply credit earned at grocery stores and other retailers to college tuition. At Upromise, he noticed digital coupon businesses hadn't managed to launch a paperless model with national scale—despite diminishing competition from newspapers. After raising $9.25 million in venture capital, Rochon launched SavingStar in April, offering shoppers digital coupons redeemable at more than 24,000 grocery stores and pharmacies across the country. Users enter identification numbers on the backs of their loyalty cards at SavingStar.com, select coupons on the website or the company's iPhone app, then present their loyalty cards at checkout to redeem the coupons. They pay full price at the register, accruing savings in an online account that can be tapped via direct deposit, PayPal, or Amazon.com gift certificates. Brands pay SavingStar 50¢ for each coupon redeemed. The 30-employee, Waltham (Mass.) company has registered 410,000 users since its April launch and recently surpassed 350,000 downloads for its app. Digital coupons are 33 percent more likely than print coupons to be redeemed by new buyers of a product, according to a study published by Knowledge Networks in Palo Alto, Calif. Rochon says that SavingStar's paperless redemption system gives the company a leg up on Coupons.com, the digital coupon giant that raised $200 million in a June private placement (that gave the company a $1 billion valuation), because Coupons.com often requires shoppers to print coupons at home. Maintaining a nationwide network of stores is critical, according to Rochon, who serves as CEO. "Wherever you are, you can take action on our savings," he says. "That national platform creates efficiency for the brands." It also lets SavingStar tap into larger, national marketing budgets. Rochon projects $2 million in revenue this year and $20 million in 2012. —Patrick Clark (posted July 6, 2011)
Tom Murray (left), David Rochon
David Rochon started his career in groceries at the age of 17, packing shelves at a Brockton Public Markets in Hanson, Mass., in 1973. Over the decades that followed, he went from deli and dairy manager to an executive at grocery-marketer Catalina Marketing, and then to president of Upromise, a college saving service that allows shoppers to apply credit earned at grocery stores and other retailers to college tuition. At Upromise, he noticed digital coupon businesses hadn't managed to launch a paperless model with national scale—despite diminishing competition from newspapers. After raising $9.25 million in venture capital, Rochon launched SavingStar in April, offering shoppers digital coupons redeemable at more than 24,000 grocery stores and pharmacies across the country. Users enter identification numbers on the backs of their loyalty cards at SavingStar.com, select coupons on the website or the company's iPhone app, then present their loyalty cards at checkout to redeem the coupons. They pay full price at the register, accruing savings in an online account that can be tapped via direct deposit, PayPal, or Amazon.com gift certificates. Brands pay SavingStar 50¢ for each coupon redeemed. The 30-employee, Waltham (Mass.) company has registered 410,000 users since its April launch and recently surpassed 350,000 downloads for its app. Digital coupons are 33 percent more likely than print coupons to be redeemed by new buyers of a product, according to a study published by Knowledge Networks in Palo Alto, Calif. Rochon says that SavingStar's paperless redemption system gives the company a leg up on Coupons.com, the digital coupon giant that raised $200 million in a June private placement (that gave the company a $1 billion valuation), because Coupons.com often requires shoppers to print coupons at home. Maintaining a nationwide network of stores is critical, according to Rochon, who serves as CEO. "Wherever you are, you can take action on our savings," he says. "That national platform creates efficiency for the brands." It also lets SavingStar tap into larger, national marketing budgets. Rochon projects $2 million in revenue this year and $20 million in 2012. —Patrick Clark (posted July 6, 2011)
