Note: This post first appeared on LocalVox.com.
Last week we hosted an all-star panel of the daily deals industry highlighting the trends and important developments in the fast moving space. Summarizing the Meetup (which you should join):
- Despite Forrester’s predictions of an industry demise, the Daily Deals industry will continue to grow rapidly. Jim Moran predicts a $100b global industry within 5 years. It may morph but the position of bridging cyberspace commerce with real local products is here to stay.
- There is a disparity with what some services sell to consumers (“never pay full price again”) and what they sell merchants (“offer a discount to get full paying customers later.”) That disparity needs to be addressed by the Groupon’s of the world, while other services like Thrillist and UrbanDaddy work to create unique New York experiences that are less discount oriented and more an incremental sales channel.
- Local business owners are overwhelmed by the choices, and it simply takes too long to know the difference between the discount focused partner, the unique experience creator, as well as navigate the various financial arrangements and what they mean long term. Many businesses don’t understand their margins well enough to make informed decisions. For those business owners, they should find a trusted advisor or sit it out because the negative consequences can be severe.
- Traditional acquisition costs for deal providers are going up due to market saturation. In response, daily deal providers are doing clever things to get customers like offering $20 of Whole Foods for $10 and covering the lost as an acquisition cost.
- Groupon’s launch of a loyalty program tied to credit cards and Bloomspot’s return on investment guarantee are initial signals of a shift to longer term relationships between deal providers and merchants (and customers for that matter). Expect to see a lot more of how to monetize consumers over the long term and create merchant satisfaction.
- The future is mobile. What it looks like, we don’t quite know yet. We still need to find ways to interrupt and push messages to consumers in a way that’s not annoying.
- In the future, it is likely the deals space will splinter into the merchant agents responsible for creating deals on behalf of merchants and consumer audience aggregators like local publications who specialize in delivering targeted audiences. Trying to do both is really hard. There may or may not be brokers making sure the right deals get to the right customers, because direct partnerships are easy enough.
I want to thank our panelists, who were all top notch. You’d be hard pressed to assemble more knowledgeable and impressive experts in the deal space.
Rev. David Cianco, Thrillist Rewards
Drew Allen, ScoutMob NYC
Marc Liu, Business Development at Gourmet Marketing
Jim Moran, Co-founder at Yipit.com
Shaila Ittycheria, Director of Local at LocalResponse