Daily deal sites
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Daily deal sites






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Daily deal sites Presentation Transcript

  • 1. Daily Deal SitesBy: Avery Bowser, Kaleigh Morrison, Julia Rosenberg & Mary Wilson #SMdeepdive
  • 2. How It All Began•2001: Vente-privee.com•2004: Woot.com•2006: over 100 daily deal sites in United States•2008: Groupon•2009: LivingSocial•2011: Scrounge•Facebook attempted daily deal feature, but canceled due tolack of success•According to a study released by BIA/Kelsey, gross revenuesare projected to grow from the current $873 million to $3.9billion by 2015
  • 3. What is Social Couponing?● Local businesses team up with social coupon sites● Social couponing site informs members of the deal in their city ○ zip code ○ specify interests● Social aspect: ○ need minimum number of deals ○ referrals=benefits for you
  • 4. Most Common Sites● Groupon● LivingSocial● TravelZoo● Yipit● BuyWithMe.com
  • 5. LivingSocialFounded in 2007Employees from Revolution Health GroupStarted with small apps on Facebook–Visual Bookshelf app–PickYourFive–BuyYourFriendADrink.comDaily deals is highest grossing aspectLivingSocial Escapes
  • 6. GrouponLaunched in 2008500 markets44 countriesOwns international sites–MyCityDeal (Europe)–Beeconomic (Singapore)Groupon GetawaysGroupon Now app–“I’m Hungry” or "Im Bored"Financial troubles
  • 7. High Grossing Deals•LivingSocial and Amazon.com offered members a$20 gift card for $10–voucher attracted 1.4 million purchases•LivingSocial offered two tickets for $9 viaFandango’s ticket service for any movie–Sold 1 million tickets in 2 days, 780,000 on day onealone•Groupon offered a seven-night resort stay for $399–2,752 bought-73% discount
  • 8. The Days of Coupon Clipping are Gone!● LivingSocial commercial● Groupon commercial ○ Super Bowl ○ Controversial
  • 9. Best PracticesWhen Groupon works and when it doesn’t.
  • 10. When to use Groupon● Excess inventory ○ Clear the warehouse● Excess capacity ○ Fill the cruise boat● Repeat sales ○ Hope they come back for more
  • 11. ● Additional sales ○ Tempt them to buy more● Attract a young demographic ○ 68 percent of users are aged 18 to 34● Generate buzz ○ Expose your product to new customers
  • 12. When not to use Groupon ● Unprepared for large influxes ○ May generate demand you cannot meet ● When you never have repeat sales ○ Make sure the investment’s worth the cost It’s easy to get swept away by trends andpromises of future earnings but Groupon is not for everyone.
  • 13. Calculate the Repercussions ● You will reduce your product or service by at least 50% ● Groupon gets between 30% and 60% of that reduced price ● When will you breakeven?
  • 14. Case Study: Posies Bakery and Café Groupon Gone Wrong “Using Groupon was the single worst decision I’ve made as a business owner thus far.” Jesse, Owner
  • 15. What Went Wrong?● Publicity didnt compensate for hit to profit● Average sale: $5● Groupon: Pay $6 for $13 of product● Groupon took 50%● Minimal training● Sold 1,000 Groupons, valid for 6 months● Fraud● Opposite of yield management● Lost $10,000● Yelp ratings fell
  • 16. Interview: Sucharita Mulpuru ● @smulpuru, Analyst at Forrester Research ● Many consumers subscribe but dont buy ● Half of deals expire unused ● Aversion to more emails
  • 17. Case Study: Lauren’s Salon Spa Groupon Success Story Lauren, Owner
  • 18. Laurens Salon Spa
  • 19. The Benefits of Groupon
  • 20. Interview: Rakesh "Rocky" Agrawal ● @rakeshlobster ● Principal Analyst at reDesign ● Occasional guest on TechCrunch, Bloomberg TV, CNBC ● 4,000 followers
  • 21. How-to groupon video
  • 22. Whats Next?What experts predict for the future of daily deal sites
  • 23. Will Daily Deal Sites Survive?•Local businesses have dwindling marketing choices – oldforms are slowly dying off (ex – Yellow Page directories?)•Daily Deal companies skip a risky step for merchants:advertising
  • 24. The Breakdown•Groupon: “Too big to fail right now,” but expectedto fade out (think MySpace)•LivingSocial: Less successful than Groupon, butruns “great deals” and maintains good relationshipswith merchants
  • 25. A Positive Outlook on the Future @saparra14, representative for Scrounge: "a lotof savings for college students. Since they are still creatingawareness and a customer base I think it will get really big inthe year to come if they offer students coupons that will beused"
  • 26. On the other hand ... @erichsparks, Ambassador of SocialResponse for @uncollege: "These companies are so youngand the business model is still years from beingsustainable. I dont know if theyll be able to do it. I thinktheyll switch from catering to "coupon customers" andfocus more on retaining existing customers. At least thatswhat I would do."
  • 27. Sites May Need to Change Policies toIncrease/Continue Success•Market is becoming over-saturated (Groupon, LivingSocial, GoogleOffers, etc) – companies need to distinguish themselves•Companies that focus on creating functional and emotional bondshave higher retention rates (84% vs 30%)•Companies should pace themselves
  • 28. Companies Collaborate•Google Offers distributes deals from 15+ other sites (GiltCity, Juice in the City, kgbdeals, etc.)•Groupon dismissed offer of $6 billion – now pitching IPOof $11 billion to potential investors
  • 29. Going Mobile•“Groupon Now”•Daily Deal sites rely on impulsive decisions – mustadvertise deal at ideal moment