| July 2011
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By Corrie M. Anders
On a clear blue Saturday in June, Michael Wey and a friend decided it was the perfect time to redeem a half-price coupon at Noeteca Café & Wine Bar. Wey brunched on a $10.95 Croquet Josephine, while his companion, Jenni, enjoyed the $8.95 mushroom quiche. When they finished their last sips of coffee, Wey paid with a $20 coupon that had cost him a mere $10.
Digital coupons have become wildly popular, as owner Christine Simmons discovered when half-off deals enticed nearly 2,000 customers to her ceramics studio on Castro Street. Shown painting plates at Terra Mia under Simmons’ tutelage are David Mairs (left) and Jon Toby. Photo by Corrie M. Anders
Wey purchased the voucher through Groupon, an Internet company that brokers advertising deals in San Francisco and across the country. He wasn’t the only savvy shopper, though. In the past year, more than 2,000 customers have snagged coupons to dine at the bistro, located at the corner of Dolores and Valley streets.
Digital coupons are indeed a hot item. Unlike the paper coupons clipped from the Sunday newspaper, these “deals of the day” show up in email inboxes, and buyers purchase them online, usually with a tight deadline to do so. The promotions allow bargain hunters to obtain gift certificates on everything from dinners, saunas, and clothes, to vacations, air travel, and paintball battles. The discounts are typically 50 percent, but can run as high as 90.
The Groupon craze has attracted a number of Noe Valley merchants eager to woo new customers. And the ads appear to be working.
Wey, who has bought some 20 digital coupons for deals around the city, said the Noeteca offer was especially appealing because he had long been curious about the Parisian-style cafe.
“I live right around the corner” on 27th Street, and “we had never been here,” said Wey, a resident of Noe Valley for five years.
Kevin Jacks, 29, and Kristen Sterback, 26, don’t live in the neighborhood. But the online deal drew them to Noeteca’s patio, where they shared a bottle of Sauvignon blanc, a plate of brie, and an endive salad.
“It definitely lets me explore places I wouldn’t normally go to if I didn’t have Groupon,” said Sterback. “It was such a nice day, enjoying the sun and the patio. We didn’t want it to end.”
Noeteca’s promotion last year was so successful—with 1,200 coupons sold—that the cafe repeated the come-on this year and picked up another 1,180 wine and cuisine lovers, said co-owner Alex Kamprasert.
Most of those cashing in the coupons were Noe Valley and city residents. But Kamprasert says he’s gotten traffic from Canada, Germany, and New York, and even Kentucky.
“When they planned their trip, they went online and found the sale,” he said.
Deals on Steaks, Mugs, and Rugs
The popularity of the coupons amazed Josh Epple, owner of Drewes Brothers Meats at 1706 Church St. In March, the shop offered $15 of meats, poultry, or fish for $7—and customers quickly snapped up all 2,000 available coupons.
“It was there and gone,” Epple said. “We sold out in three hours. I could have sold 20,000.”
Christine Simmons says the digital coupons are a big draw among would-be artists at her Terra Mia ceramics studio, 1314 Castro St. Early last year, more than 600 customers paid $22 for a $45 arts package. Six months later, she offered a similar deal through LivingSocial, and returned this spring for another promotion through Groupon. She’s sold nearly 2,000.
“The first time,” Simmons said, “it was very helpful” in creating publicity about the store, which was chock full the week after Father’s Day with kids and dads hand-painting mugs, plates, and animal figures. “The second time, we saw a lot of repeat customers, and now we’ve grown so much in one year.”
Fourteen handmade Oriental and Persian rugs flew out the door before an online sale expired May 29 at Nomad Rugs, 3775 24th St. In the promotion, one customer paid $125 for a Afghanistan kilim that retailed at $250.
“We’re still waiting for all the clients to redeem their coupons,” said Nomad owner Chris Wahlgren. (They expire on May 30 of next year.) He called the digital marketing a success, saying, “we gained new clients and some of our existing clients came back to see us.”
People Like the Aroma
In April, HeliotropeSF put a little spice into its shop with a Groupon deal that let customers pay $25 for $50 worth of organic skincare and aromatherapy products.
“We sold approximately 300” coupons in 72 hours, said Jonathan Plotzker, co-owner of the year-old boutique at 1515 Church St. “The customers got a good deal.”
Plotzker said the sale lured one man who was not used to spending more than $18 for a regular moisturizer. “But here I am with my coupon,” Plotzker quoted the shopper, who treated himself to a $32 bottle of fragrance-free locally-made lotion.
Plotzker and other Noe Valley merchants say the websites do most of the work. Firms such as Groupon and LivingSocial negotiate with businesses to create the deals—generally taking half of the sale price as compensation. Then they email daily alerts to their more than 100 million subscribers.
To motivate buyers, the discounts are available for only a few hours or days before they disappear. Buyers pay in advance for the coupons, which can be redeemed for up to a year after purchase.
Groupon Clones Pop Up
The clearly lucrative trend has spawned a wave of online imitators, from giants like Google and Facebook to local media companies like the Bay Guardian and SF Weekly.
Tetsuya Maesako, who owns Hamano Sushi at 1332 Castro St., said he resisted overtures from Groupon because of the firm’s 50 percent cut. Instead, he opted for a less expensive arrangement earlier this year with SF Weekly and still sold 200 coupons at $10 for a $20 redemption.
Good deals, of course, sometimes have unforeseen consequences. Simmons of Terra Mia noted that “there are a lot of copycats out there and everyone wants a deal, half off or something.” That mindset has “created a kind of a monster,” she said.
Epple has a different pet peeve. While a number of his patrons redeemed their $15 coupon as part of a bigger purchase, spending say $50 on meat for a barbecue, more than a few customers selected items that added up to just below the coupon’s value.
“You get the ones who only want to do the $15. So when they get to $13, they say, ‘Give me two slices of bacon,’” Epple said. “I say, ‘Oh boy.’”