Inc. 5000 Applicant of the Week: ShopAtHome.com
As we process applications for the 2011 Inc. 500 | 5000, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. One that caught our eye was Denver-based ShopAtHome.com.
This year, ShopAtHome.com marks a milestone nearly no other web-based company shares. Celebrating 25 years in business, the online coupon provider precedes the invention of its current platform.
"We're an online company older than the internet," says co-founder and president Marc Braunstein.
Today, ShopAtHome.com is one of the largest online providers of retail, grocery, and restaurant coupons. The site boasts more than 100,000 coupons for more than 50,000 merchants, a combination of local and brand name retailers, as well as free samples, giveaways, and contests to help shoppers save time and money.
ShopAtHome.com distinguishes itself from competitors by providing cash back to consumers for any purchases made through their site. This feature has helped the site grow into a coupon powerhouse, seeing an average 37 million (roughly 10 million unique) hits each month in 2010 and further growth so far in 2011.
The success of ShopAtHome.com today has eclipsed its modest beginnings. Braunstein, a sales manager, and his wife Claudia, an accountant, were both unemployed in 1986 when the couple created a company offering a "Catalog of Catalogs" that would eventually develop into ShopAtHome.com. They realized a need for such a middleman between consumers and retailers through Claudia's attempts to shop at Lands' End without having the catalog at hand.
"Lands' End would like to have my wife's name as a consumer, and my wife wanted to meet up with Lands' End," says Braunstein. "We viewed ourselves as the ultimate connection."
Starting with $100,000 in angel capital, the couple released a press release from their bedroom-based office and quickly gathered participants for their direct mail catalog. They transferred this middleman premise online in 1998 and continued to watch their business grow. Encouraged by their advertisers, ShopAtHome.com transitioned from catalogs to coupons beginning in 2003, gradually adding to this platform. Two years ago, ShopAtHome.com discontinued its still-profitable catalog to focus on coupons, cash back, and most of all its consumers.
Beyond serving as a coupon database for consumers and a consumer database for retailers, ShopAtHome.com acts as a social networking company. Its consumer base, primarily middle-class women over 40 with children, interacts with one another and with the site by recommending coupons and participating in weekly votes. ShopAtHome.com also tailors its deals to specific consumers based on their previous activity on the site and shares exclusive discounts with its million plus Facebook fans.
"We work very aggressively to keep that consumer in mind and target easy was for them to save money," Braunstein says. "That's why our growth has been so stellar."
Since its coupon-based services really took hold in 2007, ShopAtHome.com's revenue has leapt from $6.5 million to $35.4 million in 2010. The site has new ideas for future growth, though none that it's ready to announce quite yet. "As long as we keep our consumer in mind and as long as we focus on great goals for that consumer, there's a tremendous amount of expansion opportunity and many great deals that are available," Braunstein says.
As ShopAtHome.com continues to expand, it maintains its customer-first business model. By committing to cash rebates and other perks, the company expects to generate even more business in the future. "We have competitors who don't give any cash back, who don't think about the consumer, and I imagine their margins look better than ours," says Braunstein. "But they won't enjoy our growth. We'll roll over them as a company."