Lessons From Daily Deals Summit NYC
The euphoria of the 2010 and the unbridled optimism of early 2011 has now turned into a little dose of scepticism; call it collective holding of the breath, where many in the space have had to spend more time defending their business than operating them. The Race for this trillion dollar space is still on but proving a harder nut to crack than initially thought by most. What is next? Where are we heading? Is the Industry experiencing growing pains or does the model need to shift? Here is what I learned at the Daily Deals Summit NYC.
1. The Daily Deal Space in 2012 continues to grow but not as the same furious rate as in 2011. The reasons are put down to:
- Less advertising dollars being spent on new customer acquisition.
- Angel Investment has dropped 80 – 90% in the last 12 month.
- Only 30% of both Merchants and Consumers are aware of daily deals and a large % of these have been burnt by the space in one form or another.
2. The new verticals in both Products and Travel have been a huge success and still rapidly growing as % of revenue for DD sites. The reasons are put down to:
- Redemption of Product and Travel deals can be done online and no need to print coupon and go to location to use
- 10% + of local deals are never redeemed leaving bad taste in consumers mouth as the whole purpose was to save money. This is compared to only 3% of product deals and 1% of travel deals not being redeemed.
- The Travel category on DD sites has the highest trust levels with consumers followed by Product Deals. The least trust is associated with Local Deal due to non-redemption rates and local merchant not living up to expectations or promises.
3. Greater need for DD sites to support merchants with redemption strategies and consumer loyalty platforms.
- Are consumer of daily deals a customer of the merchant or DD site? Ie. If you buy a Domino’s Pizza deal from Groupon are you a Groupon Customer or a Domino’s Customer?
- Unless DD sites views change on the ownership of these customers; merchants will continue to provide B grade services as they see little customer loyalty from these buyers and have no tools to take ownership of them.
- A DD sites is no different from any traditional media and advertising medium.
- Merchants need to have the ability to build a rapport with customers sourced from DD sites and not feel like these are DD sites customers rented to them for the day. Helping merchants develop and deliver retention strategies is the key to creating long term clients.
4. So what is the future of the DD market?
- The DD space is basically becoming anything you can buy for a discount for a short period of time…. FLASH OFFERS…
- The DD space is moving away from local commence and more about building a database of shoppers.
- Local commerce is still a huge opportunity but strategies need to be developed to manage and deliver results for the thousands local merchants who can potentially utilize DD sites. Managing Local commerce in a scalable fashion presents the biggest challenge.
5. Hot Opportunities include:
- DD sites partnering with Big Brands – Big brands are becoming aware that they can cash in and sell DD’s themselves using their existing marketing channels. If you run a DD you need to start engaging big brands they will do it themselves and decrease DD sites market share.
- Rural and smaller communities are begging for DD’s in their area. First players into these long-tail markets will win market share and make it very difficult for others to enter the market.
- Mobile express checkouts… one click purchases on mobile. If you are not thinking about this you should be!
- Big Data is the future of the DD and online ecommerce space. He who re-targets and optimizes earns more and has happier more engaged consumers.
- Using Social logins increases the likely hood that a user will come back and login to your site by 50%.. THAT’s HUGE!!
6. Other Cool Ideas that are having huge success in the DD space:
- Pairing/up-selling offers to create a full outing for a user. Ie movie ticket + candy.
- Elite deals and Member perks.
- Charity and social responsibility.
If you made it through all that you are doing pretty well however it is only the tip of the ice berg from 2 full days at the 2012 Daily Deal Summit.
I hope this gives you some good insight of what is happening in the US and where the space is heading. If you have any questions, please get in contact