The couponing industry is 125 years old, and in that time it hasn’t changed that much. Users are forced to go through a laborious process to save just a bit of money on groceries and other products. Well, Endorse is coming to consumers with a simpler way to get discounts on everyday products, with a set of mobile apps that will allow them to get money back on everyday items like soft drinks, snacks, and toilet paper.
We first wrote about Endorse when it raised $4.25 million from Accel Ventures and SV Angel in January. When it first launched, it was a web-only experience, with users choosing items to buy from Endorse.com and then mailing receipts in to receive credit from their purchases. (!!!) Not long after, it launched iPhone and Android mobile apps in a closed beta test. Now the startup is opening those apps up to anyone who wishes to use them, enabling users to save between 10 percent and 100 percent on purchases.
The apps work like this: You go to a local store and open up the app, and it’ll offer up discounts on various products like soft drinks, snacks, and toilet paper. You purchase the items you want, and after you’ve paid you take a photo of your receipt. Endorse then makes note of the items, and credits your account with whatever discount should be applied. Once the account has reached $25, Endorse will cut you a check — although it’s looking into quicker means of payment, like through PayPal, issuing reloadable debit cards, or automatically crediting the account you paid with.
The whole thing turns the 125-year old coupon industry on its head. For consumers, the app eliminates the need to clip coupons, many of which can only be used in specific stores. They can get discounts on products featured in Endorse, regardless of where they were purchased — whether it be in their ultra supermarket, local corner store, or the gas station’s Qwik-E-Mart while on the road.
For brands, the app provides better targeting and analytics. Consumer brands spend some $5 billion in coupons every year, but only 1 percent of all coupons are actually redeemed, according to Endorse founder and CEO Steven Carpenter. Even worse, once redeemed, the brands have no information about who actually used the coupon.
Instead of spending billions of dollars on mailers and coupons run in the newspaper and having no idea who is using them, Endorse provides brands with detailed data about where purchases were made, and data around who’s made purchases with the discounts. Endorse connects with Facebook, so it can provide aggregate demographics data about its users.
That means it could also better target users with discounts, rather than blinding issuing coupons to the general population. The whole thing creates a better feedback loop between consumers and brands. As a result, it’s already drawing interest from some big consumer brands. Carpenter wouldn’t comment on the companies that it is working with, but a quick glance through the app shows brands from consumer goods companies like PepsiCo and General Mills.
Carpenter incubated the startup as an entrepreneur-in-residence at Accel, after selling Cake financial to Etrade in 2010. Early employees to Endorse come from YouTube and PayPal, and have been building both the back end platform for brands to promote their products, as well as the apps that consumers use.
The company now has 12 employees, and is already generating revenue, as it gets a cut for purchases made thanks to the discounts it offers. While it’s being used mainly for groceries today, Endorse could spread to other product categories as time goes on. That could mean more discounts for consumers, and for brands, it could mean a better way to reach their customers.