Yipit Webinar 8-19-10

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These slides appeared in a 8-19-10 webcast: Local Social Commerce - The Explosion of Group Buying
http://internet2go.net/webcasts/social-networks/webcast-local-social-commerce-opportunities-group-buying

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  • Groupon Successin 17 months, valued at $1.35 billion, generating $200 mm of net revenue, $50 mm of EBITDALivingSocial, copycat, raises $25 millionEasy to launchTechnology is simple and cheapNo capital costs-Can launch in just one market-98% of businesses want to do Groupon again, but can’t-Can you be competitive and profitable?-If the deal is unique, you are competitive-Make immediate revenue-Being in many cities doesn’t really matter-No big ongoing costs other than human capital-Can be run as a small, successful business-Distribution is the toughest but Yipit and others are helping to solve thatEven a downside to being too big since deals are perceived to be bad after too many people know about them
  • Launched in November of 2008What did Groupon do
  • Yipit Webinar 8-19-10

    1. 1. Local Social Commerce: The Explosion of Group Buying<br />August 19, 2010<br />
    2. 2. Agenda<br /><ul><li>Competitive Landscape
    3. 3. Consumer Behavior
    4. 4. SMB Value
    5. 5. Conclusion</li></li></ul><li>Introduction<br />About Yipit<br /><ul><li>Yipit = “Kayak.com” for Daily Deals
    6. 6. Launched Feb 2010
    7. 7. Available in 8 Cities
    8. 8. API Launching Soon
    9. 9. Atlanta
    10. 10. Boston
    11. 11. Chicago
    12. 12. Denver*
    13. 13. Los Angeles
    14. 14. NYC
    15. 15. San Diego
    16. 16. San Frnacisco</li></li></ul><li>Competitive Landscape<br />Drivers for Decentralization<br /> Remarkable Success<br />+<br />120+ <br />local <br />group-buying<br />services<br />=<br />Easy to Launch<br />+<br />Immediately Competitive;<br />Generating Revenue<br />
    17. 17. Competitive Landscape<br />Daily Deal Proliferation<br />________________________________________________________________________<br />US only, see blog.yipit.com for further data. <br />Worldwide figure greater than 500 (TechCrunch, 7/30/10)<br />
    18. 18. Competitive Landscape<br />Publishers Enter via White-Label<br />Exclusive Deals From…<br />Powered by…<br />________________________________________________________________________<br />US only, see blog.yipit.com for further data. <br />Worldwide figure greater than 500 (TechCrunch, 7/30/10)<br />
    19. 19. Consumer Behavior<br />Breakage Rate ≤20%<br />________________________________________________________________________<br />Recent data on Groupon is consistent: (i) breakage of 10% (TechCrunch, 8/14/10), and (ii) 20% redemption in month 1 and 15% redemption in month 12 (Chicago Tribune 8/16/10).<br />
    20. 20. Consumer Behavior<br />Revenue Varies by Category<br />________________________________________________________________________<br />Most common Daily Deal categories. Data from 807 past Daily Deal promotions, normalized for list size. Revenue = price * quantity sold<br />
    21. 21. SMB Value<br />Business Satisfaction<br />________________________________________________________________________<br />Data from Yipit phone survey of SMBs who have completed a Daily Deal in the last 12 months. 80 responses. Groupon’s reports repeat interest at 97% (grouponworks.com)<br />
    22. 22. SMB Value<br />Beginning to Shift Ad Spend<br />________________________________________________________________________<br />Data from Yipit phone survey of SMBs who have completed a Daily Deal in the last 12 months. 80 responses. <br />
    23. 23. SMB Value<br />Consumer Retention is Difficult…<br /><ul><li>Deal driven consumers
    24. 24. SMB does not own email
    25. 25. Sample reports 19% retention1</li></ul>________________________________________________________________________<br />1. Defined as Daily Deal customers returning for at least one more visit. NB: Very difficult for most SMBs to quantify, limited sample size.<br />
    26. 26. SMB Value<br />…But May Improve Over Time<br /><ul><li>Apps offering incentives for repeat deal (eg, Scoutmob)
    27. 27. Savvy businesses offering follow-on discounts
    28. 28. Deal proliferation means more deals in home-work corridor</li></ul>ScoutmobiPhone App<br />
    29. 29. Conclusion<br />Expect Continued Growth<br /><ul><li>Increasing fragmentation, led by publisher/white-label partnerships
    30. 30. High consumer growth and low breakage rate
    31. 31. High SMB satisfaction
    32. 32. Daily Deals are a potentially disruptive local advertising channel</li></ul>________________________________________________________________________<br />1. Defined as Daily Deal customers returning for at least one more visit. NB: Very difficult for most SMBs to quantify, limited sample size.<br />
    33. 33. Done<br />Thank You<br />Read more<br />blog.yipit.com<br />Questions? Comments?<br />jim@yipit.com<br />@jdmoran<br />

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