Deala day business model

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Deala day business model

  1. 1. DEAL A DAY BUSINESS MODEL Group Name: SellMore Naveen Gupta 09BM8033 Vipin Dutt 09BM8091
  2. 2. Business Concept <ul><li>One deal a day is a web-based business model in which a single type of product is offered for sale for a period of 24 hours </li></ul><ul><li>Deals works as an assurance contract using The Point's platform: if a certain number of people sign up for the offer, then the deal becomes available to all;if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools </li></ul>
  3. 3. Variations <ul><li>Longer time frames, such as a week </li></ul><ul><li>Progressively decreasing prices </li></ul><ul><li>Choosing between two different deals </li></ul><ul><li>Locating deals on auction sites such as eBay </li></ul><ul><li>Free Shipping </li></ul><ul><li>Most charge less than $5 for shipping </li></ul>
  4. 4. Top 20 daily deal site in India
  5. 5. Contd…
  6. 6. Contd…
  7. 7. Contd…
  8. 8. Snapdeal.com
  9. 9. Mydala.com
  10. 10. Koovs.com
  11. 11. Online Deals BUSINESS MODEL Customer signs with DealaDay Deal reaches critical mass Customers pay DealaDay Payments spread out in 3 installments over lifecycle of deal, leading DealaDay with negative working capital DealaDay pays merchant share Merchant signs up Customer redeems coupon at merchant DealaDay features deal DealaDay decides which deals are featured in a ZIP code area
  12. 12. REVENUE MODEL Net revenue # of deals Net deal size # of geographies Categories/ geography Discounted deal price Share to Dealsite(%) Gross/ List price Discount to customers (%) x x x x Long waiting list of merchants waiting to be featured Typically 30-50% ~ 50%. May trend downwards due to competitive pressure Function of category; seems to have increased India international local national GAP, Body Shop Main deal Side deals stores New experimental feature
  13. 13. Benefit to customers <ul><li>Deep discounts </li></ul><ul><li>Discover services/merchandise that they didn’t know of </li></ul><ul><li>Access to new services/merchandise </li></ul><ul><ul><li>smaller ‘side deals’ in addition to main deal </li></ul></ul><ul><ul><li>Deal personalization based on voluntary disclosure of preferences </li></ul></ul><ul><ul><li>Deals divided up by ZIP code </li></ul></ul>
  14. 14. Customer demographics <ul><li>Early adopters: Highly affluent with disposable income </li></ul><ul><ul><li>‘ Urban females’ </li></ul></ul><ul><ul><li>18-34 yrs </li></ul></ul><ul><li>Likely facebook and Twitter users </li></ul><ul><li>60k-200k users/ city </li></ul><ul><li>100- 1000 users/deal/city </li></ul><ul><li>http://aimgroup.com/blog/2010/08/20/groupon-goes-niche-with-new-%E2%80%98deal-personalization%E2%80%99/ </li></ul>
  15. 15. MERCHANT OBSERVATIONS <ul><li>Best Suited Businesses </li></ul><ul><li>High fixed cost businesses </li></ul><ul><li>High customer acquisition cost </li></ul><ul><li>Business thriving on repeat customers. </li></ul><ul><li>Rice University study: </li></ul><ul><ul><li>66% successful </li></ul></ul><ul><ul><li>Examples: lifestyle businesses, e.g. spas (82% successful), sailing, restaurants (58% successful), education </li></ul></ul><ul><li>Key Merchant Economics </li></ul><ul><li>Revenue: Typically retains 50% of the deal minus credit card fees </li></ul><ul><li>Redemption rate: ~80% </li></ul><ul><li>Incremental spending: Gap expectation that customers will spend more than just $50, likely upward of $75 to $100 once in the store </li></ul><ul><li>Repeat customers: 22% repeat business </li></ul>Dealsites proposition: Guaranteed revenue and large number of new customers. http:// blogs.wsj.com/venturecapital/2010/09/29/rice-university-study-groupon-renewal-rate-not-so-hot /
  16. 16. MERCHANT PERSPECTIVE ON CUSTOMER INTERACTION Merchant / Get customer to follow on Offer on Like it on Respond to Advertise on Deal a Day
  17. 18. Industry Analysis
  18. 19. Industry Analysis contd…
  19. 20. Snapdeal.com Analysis
  20. 21. Contd…
  21. 22. Contd…
  22. 23. Top Online Shopping Sites- Nation Wide
  23. 24. Future technical improvements <ul><li>The site can launch a mobile application available on Wap, Android, iPhone and Blackberry. It allows users to buy deals on their phones and retrieve them using the screen as a coupon. </li></ul>
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