How's New Mobile App Is Digging Up Grocery Coupon Deals

Story by Benjamin F. Kuo


Last week,, the online coupon site based in Los Angeles, made a big move into the world of grocery store coupons, from its existing business providing coupon codes and deals for the online world. To hear about how the company decided to expand into the market, we caught up with CEO Loren Bendele to learn more about its new grocery store coupon app, Favado (

Explain what Favado is all about?

Loren Bendele: It might be useful to talk about why we're doing this, and why we're getting into this. We, as a company, have been more focused on online deals and coupons, and haven't been focused on groceries at all. But, a few things happened, all at once. First, we had developed a relationship with top grocery bloggers, who we had been working with on online promotions. They had provided content on our website, and they had promoted to their audience on what we're doing. We had been working on how to get them focused on online deals and e-commerce, and less on groceries. However, based on a couple of other things, we finally woke up and said--why are we talking about these bloggers about all of these other things we have coupons for, and instead get into groceries, since we have such an influential audience, and some very strong content creators in the grocery space. That was one factor, which is our relationship with some of the most knowledgeable people who know how to cut grocery bills by 40 to 70 percent.

Another factor, was the large number of people searching our site for grocery coupons, something we didn't have. It was the largest category of coupons on our site that people were searching for, but we didn't have any grocery coupons. On top of that, there's been a massive change going on in how grocery coupons are used, which is happening right now. The grocery coupon industry is changing pretty substantially, and there's a lot of disruption going on. We felt it was a good time to come out with a new play. We thought we could solve the consumer's problems better than anyone else, because of our relationship with these money saving experts in the grocery space. They are providing the content, and more, for what we're doing.

Can you talk about the app?

Loren Bendele: We started looking at the type of people who are grocery couponing today. The ones who are doing it feverishly are a small niche of people, which really is all of the grocery bloggers today, who figure out what is on sale, what coupons are also available, and stack those coupons on top of those sales. However, although it's a large audience, that's pretty niche. There's also a whole group of people, who may or may not do all that work, but would like a way to save a little bit when they visit the grocery store, and not miss a great deal. We created Favado to both serve the casual money saver--you can pull up the app, and it gives you the top sale items right then and there, so that you don't miss out on a deal--but it also works for the super-couponer. While they're at home, they can look across their favorite grocery stores, see what's on sale, and if there are coupons available. They can mark which ones they want, and press print, if those coupons are available online. You can email the list to yourself or print it from home, and then walk into one store to get all the items you need. It also allows super couponers to mass up coupons and sales, and shows you where you can find all of the coupons for an item. For a casual shopper, or anyone in between, while you are in a store, it makes sure you don't miss a great deal.

The app opens up a brand new audience, which couldn't bother with coupons like their grandmother did, and makes it easier for today's consumer. Everything we are doing is powered by that network of bloggers. We have about 100 money saving experts covering all of the major chains, in regions across the country, inputting what items are on sale, with lots of them walking the stores to find items that are on sale, but not on an advertiser's circular. We're matching those UPCs to coupons, and they're flagging the best ones to be on our top tab in the app as well, to point out which deals and coupons are the best at any point in time. That cumulative group of bloggers, combined with the nation's best database of grocery store coupons and sales, helps us match up the information and curate which ones to point at as the best deals. It's a stronger database than anywhere else, because we've brought together those bloggers to help identify those deals for the broader community.

I imagine this is very difficult to gather all that data--how do you manage that?

Loren Bendele: We have a group of people who are working with the bloggers, many of whom were grocery bloggers themselves. We have four women who we have had longstanding relationships, who are managing the process for us and reaching out to bloggers. It's a very manual and intensive process. Those bloggers each cover five or six stores themselves, and each one of those stores have several regions. The cover several regions, figuring out what's on sale, what coupons there are, and match them up. It's a very human intensive process, and require not just people, but smart people who know this space, and know grocery shopping. They know that toothpaste for $3.99 is not a great deal, and that ground beef on sale for $2.50 is a pretty good deal. They know what are the best deals to be aware of, and what is just noise, and what you don't need to pay attention to. It is very labor intensive, and it requires smart labor as well, so we build the tools and the system to make it as seamless and robust as possible. One of those bloggers will own a set of lists, an individual chain and region. For example, that might be Kroger Cincinnati. Those bloggers will own five or six of those, and do all of the work to maintain those lists they are working on. Other bloggers will cover other lists, and cumulatively, we have thousands of chains and locations covered. When you add up all the locations across the country, grocery stores, and drugstores, there are around 65,000 locations we're covering in every major city and store, where more people do their shopping for grocery and drugstore items.

Do you have a method of payment or rewarding those bloggers?

Loren Bendele: There are multiple things we're doing. If you look at the way they did this in the past, is bloggers who cover twenty different chains or two different regions might pay a virtual assistant to do that for them. We've now created an open source model, so that instead of doing 20 stores and paying someone to do other for you, they get the others done for free by someone else. It's made it a lot more efficient for them to get the information, and focus instead on things that are unique to them, such as their personality, their tips and tricks, their writing, doing PR. We've made them more efficient, and given them more data. Also, we help them promote themselves through our tools, and there are lots of them getting a lot of PR buzz for this. We've also been teaching them how to do SEO, though some are great at it, some are newer. We teach them and provide them tools to do that. We also have an affiliate program, so that they can take a deal on our site, and we given them 100 percent of any commissions, which is a revenue source for them. We also have an affiliate relationship where, if they promote their app and get people to use the app, we give them money generated from the affiliate sourcing around grocery coupons. It's a very strategic partnership and relationship. It's less about cutting a check, but more about helping them grow their business and generate recurring revenues. It's good for them, and good for us.

How does this work, when many coupons still only available in your Sunday circular?

Loren Bendele: If you go to a grocery blogger class, they will tell you that you can save 30 to 40 percent on a regular basis, just by buying on sale, even when you're not using coupons. You just need to find something that is on sale, and buy enough of that item to last until it goes on sale again. That's just one point, but the app is very powerful, even if you never bother with a coupon. Even if you just focus on sales, you can save 30 to 40 percent on a regular basis, on your weekly grocery bill. That's a big deal. However, if you want to get to the 50-, 60-, and 70-percent savings on a regular basis, you have to put coupons on there. To your point, the majority of coupons are still distributed through your Sunday newspaper, from Smartsource, or Red Plum inserts that go inside your Sunday newspaper. What super couponers do, is they file those every time they come in, and then the grocery bloggers do matchups for them. I'm pulling up the app right now, and it says that Albertson's here in Los Angeles has Hunt's Ketchup, 24 oz., on sale for $1.00. There's a paperclip next to it, so you know there's also a coupon available.

If you click on that item, it tells you that there's a 20 cent off for Hunt's, any bottle, which was sent out on September 22nd in SmartSource. So, you can go to your file, find the September 22nd circular, and that's where you'll find that coupon. If you can find that coupon, you can get that item for 60 cents. That's what the app can help them do. It tells you what's on sale, what are the best sale items, and lets you click on the coupon with a red paperclip. If there are more ways to save, it will tell oyu all of the available coupons and where to find them, and includes links to to find digital coupons to print, and also has lots of other sources, which will load deals into your card or print a coupon for a particular grocery store. We see that continuously and rapidly evolving. Our goal, is whatever coupon is available, we'll show you it. We want to be like the Kayak for coupons. We're sort of agnostic here, and show you the best coupons for the items on sale and tell you how to get them. It's your choice if you want to save those circulars, or just do printable coupons, or just see what's on sale and find great sales. This app works for you.

At the strategic level, and given the difficulty of doing this, why enter the grocery coupon market?

Loren Bendele: It's a massive business opportunity. The grocery coupon market is an $8 to $10 billion dollar a year market space. The amount of money that retailers spend on advertising, to convince you to go to Ralph's vs. Kroger's vs. Albertson's amounts to multiple billions of dollars. There's big money in here. Plus, groceries are the average consumer's largest discretionary expense. Most people go the grocery store two or three times a week, spending $400 a month on average. The only regular expenses which are bigger are mortgages or your rent, and your car payment. We can't do anything particular about those, for the most part, but if we can cut your grocery bill by 50 or 70 percent, that's a lot of money that you're saving for a ton of people. It's a massive business opportunity for us, as well. It's a massive opportunity, we've got really strong strategic assets, and we have a leg up on our competition because of our relationships with these grocery bloggers, and we have a strong technology and app. We're at a time in the grocery store industry, which has not been seen in the past fifty years. There's massive disruption going on, and I feel like it's anybody's game, and we can become one of the most dominant players in the grocery coupon and money saving space.