Chicago might want to change its nickname from Chi-Town to Couponland. The windy city likes online couponing – and did so years before Groupon hit the radar.
The windy city counts 43 daily-deal group-buying site headquarters including two of the oldest, FatWallet (est. circa 1999), and MrRebates (b. 2002), as well as two of the largest, Groupon.com and CouponCabin.com.
"Chicago is the cradle of civilization for the daily-deal industry," says Dan Hess, CEO of Local Offer Network and Chicago-based deal aggregator Dealradar. "It gained an early lead and continues to lead the pack."
The raison d’être for Chicago’s deal fecundity?
"We apply the old-fashioned, salt-of-the-earth Midwestern values to startups and the Internet. There is a deep-rooted practicality in Chicago and the Midwest. Our startups solve real problems, like helping people save money or be more frugal," says Brad Wilson of BradsDeals.
But Ed Longanecker, regional VP for TechAmerica, sees a more business savvy reason. "There is simply a stronger desire and more potential to be a center for innovation in Illinois. I have not seen, other than maybe in California, such a concentration of entrepreneurial-focused organizations and more emphasis and passion for growing the technology industry in a state.”
Illinois is home-base for 9,000 performance-marketing businesses that earn $610 million, according to the Performance Marketing Association. FatWallet, the grandfather of online deals excels in performance marketing - a commission on every sale, while CouponNetwork, the most recent Chicago entrant focuses on printable coupons in categories still under-served: baby, pet, organic and gluten-free items.
BC recently covered another Chicago start-up, BareDeal, a disruptive "Groupon meets Netflix" service that delivers scratch cards directly to consumers' mailboxes.
Groupon’s Chicago roots have certainly leaked into the state’s DNA. "Twelve years ago, venture capitalists threw billions into online auctions, and now we have eBay. Venture capitalists threw billions into online department stores, and now we have Amazon. In 12 years, I'm positive that Groupon will still be here. I can't say that about its competitors yet,” says Dan de Grandpre, editor-in-chief and chief executive of DealNews.
Meanwhile, beyond Chicago and across America, the top 10 U.S. deal sites, based on number of markets served in average day:
(Source: Dealradar.com/Local Offer Network)