Daily Deal Sites By: Avery Bowser, Kaleigh Morrison, Julia Rosenberg & Mary Wilson      #SMdeepdive
How It All Began <ul><li>• 2001: Vente-privee.com </li></ul><ul><li>• 2004: Woot.com </li></ul><ul><li>• 2006: over 100 da...
What is Social Couponing?     <ul><ul><li>Local businesses team up with social coupon sites </li></ul></ul><ul><ul><li>Soc...
Most Common Sites      <ul><ul><li>Groupon </li></ul></ul><ul><ul><li>LivingSocial </li></ul></ul><ul><ul><li>TravelZoo </...
LivingSocial <ul><li>Founded in 2007 </li></ul><ul><li>Employees from  Revolution Health Group </li></ul><ul><li>Started w...
Groupon <ul><li>Launched in 2008 </li></ul><ul><li>500 markets </li></ul><ul><li>44 countries </li></ul><ul><li>Owns inter...
High Grossing Deals <ul><li>• LivingSocial and Amazon.com offered members a $20 gift card for $10 </li></ul><ul><li>– vouc...
The Days of Coupon Clipping are Gone! <ul><ul><li>LivingSocial commercial </li></ul></ul><ul><ul><li>Groupon commercial </...
Best Practices When Groupon works and when it doesn’t.
When to use Groupon <ul><ul><li>Excess inventory </li></ul></ul><ul><ul><ul><li>Clear the warehouse </li></ul></ul></ul><u...
<ul><ul><li>Additional sales </li></ul></ul><ul><ul><ul><li>Tempt them to buy more </li></ul></ul></ul><ul><ul><li>Attract...
When not to use Groupon <ul><ul><li>Unprepared for large influxes </li></ul></ul><ul><ul><ul><li>May generate demand you c...
Calculate the Repercussions <ul><ul><li>You will reduce your product or service by at least 50% </li></ul></ul><ul><ul><li...
Case Study: Posies Bakery and Café Groupon Gone Wrong Jesse, Owner “ Using Groupon was the single worst decision I’ve made...
What Went Wrong?  <ul><ul><li>Publicity didn't compensate for hit to profit  </li></ul></ul><ul><ul><li>Average sale: $5 <...
Interview: Sucharita Mulpuru <ul><ul><li>@smulpuru,  Analyst at Forrester Research </li></ul></ul><ul><ul><li>Many consume...
Case Study: Lauren’s Salon Spa Groupon Success Story Lauren, Owner
Lauren's Salon Spa
The Benefits of Groupon
Interview: Rakesh &quot;Rocky&quot; Agrawal <ul><ul><li>@rakeshlobster  </li></ul></ul><ul><ul><li>Principal Analyst at  r...
 
 
 
How-to groupon video
 
What's Next? What experts predict for the future of daily deal sites
Will Daily Deal Sites Survive? <ul><li>• Local businesses have dwindling marketing choices – old forms are slowly dying of...
The Breakdown <ul><li>• Groupon: “Too big to fail right now,” but expected to fade out (think MySpace) </li></ul><ul><li>•...
<ul><li>                           </li></ul><ul><li>                            @saparra14,  representative for Scrounge ...
On the other hand ... <ul><li>                        @erichsparks,  Ambassador of Social Response for @uncollege : &quot;...
Sites May Need to Change Policies to Increase/Continue Success      <ul><li>• Market is becoming over-saturated (Groupon, ...
Companies Collaborate <ul><li>• Google Offers distributes deals from 15+ other sites (Gilt City, Juice in the City, kgbdea...
Going Mobile <ul><li>• “ Groupon Now” </li></ul><ul><li>• Daily Deal sites rely on impulsive decisions – must advertise de...
 
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Daily Deal Sites

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  • -36% of subscribers never bought a deal -only 26% purchased 4 or more -46% of customers fail to redeem offers prior to expiration -29% of respondents discontinued/terminated deals because were sick of emails -49% never even signed up bc of annoying emails **36% never heard of such sites?!
  • Daily Deal Sites

    1. 1. Daily Deal Sites By: Avery Bowser, Kaleigh Morrison, Julia Rosenberg & Mary Wilson     #SMdeepdive
    2. 2. How It All Began <ul><li>• 2001: Vente-privee.com </li></ul><ul><li>• 2004: Woot.com </li></ul><ul><li>• 2006: over 100 daily deal sites in United States </li></ul><ul><li>• 2008: Groupon </li></ul><ul><li>• 2009: LivingSocial </li></ul><ul><li>• 2011: Scrounge </li></ul><ul><li>• Facebook attempted daily deal feature, but canceled due to lack of success </li></ul><ul><li>• According to a study released by BIA/Kelsey, gross revenues are projected to grow from the current $873 million to $3.9 billion by 2015 </li></ul>
    3. 3. What is Social Couponing?     <ul><ul><li>Local businesses team up with social coupon sites </li></ul></ul><ul><ul><li>Social couponing site informs members of the deal in their city </li></ul></ul><ul><ul><ul><li>zip code </li></ul></ul></ul><ul><ul><ul><li>specify interests </li></ul></ul></ul><ul><ul><li>Social aspect: </li></ul></ul><ul><ul><ul><li>need minimum number of deals </li></ul></ul></ul><ul><ul><ul><li>referrals=benefits for you </li></ul></ul></ul>
    4. 4. Most Common Sites    <ul><ul><li>Groupon </li></ul></ul><ul><ul><li>LivingSocial </li></ul></ul><ul><ul><li>TravelZoo </li></ul></ul><ul><ul><li>Yipit </li></ul></ul><ul><ul><li>BuyWithMe.com </li></ul></ul>
    5. 5. LivingSocial <ul><li>Founded in 2007 </li></ul><ul><li>Employees from Revolution Health Group </li></ul><ul><li>Started with small apps on Facebook </li></ul><ul><li>– Visual Bookshelf app </li></ul><ul><li>– PickYourFive </li></ul><ul><li>– BuyYourFriendADrink.com </li></ul><ul><li>Daily deals is highest grossing aspect </li></ul><ul><li>LivingSocial Escapes </li></ul>
    6. 6. Groupon <ul><li>Launched in 2008 </li></ul><ul><li>500 markets </li></ul><ul><li>44 countries </li></ul><ul><li>Owns international sites </li></ul><ul><li>– MyCityDeal (Europe) </li></ul><ul><li>– Beeconomic (Singapore) </li></ul><ul><li>Groupon Getaways </li></ul><ul><li>Groupon Now app </li></ul><ul><li>– “ I’m Hungry” or &quot;I'm Bored&quot; </li></ul><ul><li>Financial troubles  </li></ul>
    7. 7. High Grossing Deals <ul><li>• LivingSocial and Amazon.com offered members a $20 gift card for $10 </li></ul><ul><li>– voucher attracted 1.4 million purchases </li></ul><ul><li>• LivingSocial offered two tickets for $9 via Fandango’s ticket service for any movie  </li></ul><ul><li>– Sold 1 million tickets in 2 days, 780,000 on day one alone </li></ul><ul><li>• Groupon offered a seven-night resort stay for $399 </li></ul><ul><li>– 2,752 bought </li></ul><ul><li>-73% discount </li></ul>
    8. 8. The Days of Coupon Clipping are Gone! <ul><ul><li>LivingSocial commercial </li></ul></ul><ul><ul><li>Groupon commercial </li></ul></ul><ul><ul><ul><li>Super Bowl </li></ul></ul></ul><ul><ul><ul><li>Controversial  </li></ul></ul></ul><ul><li>                      </li></ul>
    9. 9. Best Practices When Groupon works and when it doesn’t.
    10. 10. When to use Groupon <ul><ul><li>Excess inventory </li></ul></ul><ul><ul><ul><li>Clear the warehouse </li></ul></ul></ul><ul><ul><li>Excess capacity </li></ul></ul><ul><ul><ul><li>Fill the cruise boat </li></ul></ul></ul><ul><ul><li>Repeat sales </li></ul></ul><ul><ul><ul><li>Hope they come back for more </li></ul></ul></ul>
    11. 11. <ul><ul><li>Additional sales </li></ul></ul><ul><ul><ul><li>Tempt them to buy more </li></ul></ul></ul><ul><ul><li>Attract a young demographic </li></ul></ul><ul><ul><ul><li>68 percent of users are aged 18 to 34 </li></ul></ul></ul><ul><ul><li>Generate buzz </li></ul></ul><ul><ul><ul><li>Expose your product to new customers </li></ul></ul></ul>
    12. 12. When not to use Groupon <ul><ul><li>Unprepared for large influxes </li></ul></ul><ul><ul><ul><li>May generate demand you cannot meet </li></ul></ul></ul><ul><ul><li>When you never have repeat sales </li></ul></ul><ul><ul><ul><li>Make sure the investment’s worth the cost </li></ul></ul></ul><ul><li>It’s easy to get swept away by trends and promises of future earnings but Groupon is not for everyone . </li></ul>
    13. 13. Calculate the Repercussions <ul><ul><li>You will reduce your product or service by at least 50% </li></ul></ul><ul><ul><li>Groupon gets between 30% and 60% of that reduced price </li></ul></ul><ul><ul><li>When will you breakeven? </li></ul></ul>
    14. 14. Case Study: Posies Bakery and Café Groupon Gone Wrong Jesse, Owner “ Using Groupon was the single worst decision I’ve made as a business owner thus far.”
    15. 15. What Went Wrong?  <ul><ul><li>Publicity didn't compensate for hit to profit  </li></ul></ul><ul><ul><li>Average sale: $5 </li></ul></ul><ul><ul><li>Groupon: Pay $6 for $13 of product </li></ul></ul><ul><ul><li>Groupon took 50% </li></ul></ul><ul><ul><li>Minimal training  </li></ul></ul><ul><ul><li>Sold 1,000 Groupons, valid for 6 months </li></ul></ul><ul><ul><li>Fraud </li></ul></ul><ul><ul><li>Opposite of yield management </li></ul></ul><ul><ul><li>Lost $10,000  </li></ul></ul><ul><ul><li>Yelp ratings fell </li></ul></ul><ul><ul><li>Minimal repeat customers </li></ul></ul>
    16. 16. Interview: Sucharita Mulpuru <ul><ul><li>@smulpuru,  Analyst at Forrester Research </li></ul></ul><ul><ul><li>Many consumers subscribe but don't buy </li></ul></ul><ul><ul><li>  Half of deals expire unused </li></ul></ul><ul><ul><li>Aversion to more emails </li></ul></ul>
    17. 17. Case Study: Lauren’s Salon Spa Groupon Success Story Lauren, Owner
    18. 18. Lauren's Salon Spa
    19. 19. The Benefits of Groupon
    20. 20. Interview: Rakesh &quot;Rocky&quot; Agrawal <ul><ul><li>@rakeshlobster  </li></ul></ul><ul><ul><li>Principal Analyst at  reDesign </li></ul></ul><ul><ul><li>Occasional guest on TechCrunch, Bloomberg TV, CNBC </li></ul></ul><ul><ul><li>4,000 followers </li></ul></ul>
    21. 24. How-to groupon video
    22. 26. What's Next? What experts predict for the future of daily deal sites
    23. 27. Will Daily Deal Sites Survive? <ul><li>• Local businesses have dwindling marketing choices – old forms are slowly dying off (ex – Yellow Page directories?) </li></ul><ul><li>• Daily Deal companies skip a risky step for merchants: advertising </li></ul>
    24. 28. The Breakdown <ul><li>• Groupon: “Too big to fail right now,” but expected to fade out (think MySpace) </li></ul><ul><li>• LivingSocial: Less successful than Groupon, but runs “great deals” and maintains good relationships with merchants </li></ul>
    25. 29. <ul><li>                           </li></ul><ul><li>                           @saparra14, representative for Scrounge : &quot;a lot of savings for college students. Since they are still creating awareness and a customer base I think it will get really big in the year to come if they offer students coupons that will be used&quot; </li></ul>A Positive Outlook on the Future
    26. 30. On the other hand ... <ul><li>                        @erichsparks, Ambassador of Social Response for @uncollege : &quot;These companies are so young and the business model is still years from being sustainable. I don't know if they'll be able to do it. I think they'll switch from catering to &quot;coupon customers&quot; and focus more on retaining existing customers. At least that's what I would do.&quot; </li></ul>
    27. 31. Sites May Need to Change Policies to Increase/Continue Success      <ul><li>• Market is becoming over-saturated (Groupon, LivingSocial, Google Offers, etc) – companies need to distinguish themselves </li></ul><ul><li>• Companies that focus on creating functional and emotional bonds have higher retention rates (84% vs 30%) </li></ul><ul><li>• Companies should pace themselves </li></ul>
    28. 32. Companies Collaborate <ul><li>• Google Offers distributes deals from 15+ other sites (Gilt City, Juice in the City, kgbdeals, etc.) </li></ul><ul><li>• Groupon dismissed offer of $6 billion – now pitching IPO of $11 billion to potential investors </li></ul>
    29. 33. Going Mobile <ul><li>• “ Groupon Now” </li></ul><ul><li>• Daily Deal sites rely on impulsive decisions – must advertise deal at ideal moment </li></ul>

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