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Posts Tagged ‘daily deal sites’

Groupon’s Privacy Policy Catches Lawmakers’ Attention

Posted in General News / Technology, Mobile Commerce, tagged , , , , , on July 22, 2011 | Leave a Comment »

Having established itself as the clear-cut leader in the growing daily deal industry with an army of loyal fans and customers as well as an anticipated $3 billion in revenue this year alone, one would be hard pressed to say that Groupon has anything to worry about these days.

Or do they?

Two members of Congress, Rep. Ed Markey (D) of Massachusetts and Joe Barton (R) of Texas, smell something a bit fishy when it comes to Groupon’s privacy practices and have submitted a written inquiry to the company requesting more information, specifically on the issue of possible ‘mobile tracking’ of customers.

Recently, Groupon updated its privacy policies and part of the revision was a clause that allows the company to track the locations of mobile customers, even when the Groupon mobile applications are closed on their mobile devices.  Groupon initially said the change was part of its expansion of Groupon Now, which relies on geo-location technology in order to offer shoppers deals based on their real-time locations.

The policy states:

If you use a Groupon mobile application and your mobile device’s settings allow it, we may collect mobile location information from your device.  Our application may be designed to collect information even if you are not logged into the Groupon application.

Included in the policy is another clause that says Groupon can share similar information with its retail partners that offer the actual deals featured in the service.  This enables those merchants to communicate directly with consumers and target them with advertising as well.

The Markey and Barton inquiry requests an explanation from the company on how exactly it gathers location information when a user’s application is turned off, whether or not Groupon gives its customers an op-out option and whether its mobile data collection policy is consistent across all devices.

The pair, co-chairs of the Congressional Privacy Caucus, also wants more information on how and why Groupon plans to collect, and then use, consumer information.  One passage of the letter references how the policy approaches children:

“Groupon indicated that it omitted a section in its previous privacy policy discussing children’s information because its web site is not geared toward children,” it reads.  “What mechanisms does Groupon have in place to identify the age of its consumers?”

A spokesperson for Groupon says the company has received the inquiry and “looks forward” to explaining its privacy practices and overall business model to the lawmakers.  Groupon has until August 10 to respond.

Thoughts? Leave us a comment!

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In Daily Deal Industry, Everyone Else is Looking up at Groupon

Posted in Ecommerce, General News / Technology, tagged , , , , , on June 27, 2011 | 1 Comment »

While the daily deals market has become increasingly crowded over the course of the past year or so, it would appear that all of the newcomers (and even those companies that have been at it for awhile) have a long way to go before they’re going to catch up with Groupon.

A new report from the customer satisfaction research firm ForeSee Results offers a glimpse of the state of daily deals industry, revealing the Groupon has carved out a dominant position that puts the company head-and-shoulders above its competition and should, for now at least, quell any concerns about the long-term viability of the Groupon business model.

ForeSee based its report on a survey this spring of more than 22,000 shoppers who actively use many of the web’s top retail sites.  Of those polled, nearly two thirds of respondents indicated that they subscribe to at least one daily deal offering.

More than half of those consumers (51 percent) said they subscribe to Groupon, giving the company a commanding two-to-one lead over its next closest rival, Living Social.  Only 24 percent of the respondents said they subscribe to Living Social, while 14 percent use Google Offers and 10 percent rely on Woot.com, which was purchased by Amazon in 2010.

The research seems to counter many in the industry who have questioned the sustainability of Groupon’s business model, particularly from the standpoint of attracting new users.

“I don’t think anyone should be signing any death certificates yet,” ForeSee CEO Larry Freed wrote in a blog post about the report. “Groupon and LivingSocial do bring in new customers, and that should be welcome news to both retailers and daily deal companies alike.”

Indeed, ForeSee’s research shows that 31 percent of the consumers buying daily deals were new customers to the merchant offering the deal itself.  Only slightly more (38 percent) were frequent customers, while 27 percent were infrequent customers and 4 percent were former customers.

And further reinforcing just how popular daily deals have become, the data reveals that more than two-thirds of the respondents have purchased a deal in the past three months and 89 percent of those redeemed their deal in that time as well

So what about you?  Where does your daily deal allegiance lie?  Leave us a comment!

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Glenn Beck Brings a Whole Different Kind of Values to Daily Deal Shopping

Posted in Ecommerce, General News / Technology, Online Shopping, Retail, tagged , , , , , on May 24, 2011 | 1 Comment »

In what might qualify as the most random piece of news that we’ve ever reported here on Ecommerce Junkie, conservative political commentator Glenn Beck, the bane of the liberals everywhere, has launched a daily deal site called Markdown.com.

The Fox News personality, whose gig as the afternoon talk show host on the conservative network is set to end later this year, started the site through his personal media company Mercury Radio Arts.  Markdown.com will offer limited-time deals from both online and local retailers to consumers much like any other existing daily deal site.  But where Markdown will differ from the likes of Groupon and others is that it will only provide what it calls “honest” offers.  What’s that mean, exactly?

According to Beck, the site’s offers will be ones that fall in line with “a set of principles that transcends money”,  a sentiment that is very clearly underscored by the site’s featured tag line,”Value and Values”.

“Markdown.com is a way for people to connect with companies and products that respect their values and respect their hard-earned dollars,” Beck says in the site’s introductory video.  “We have an opportunity to save people money and unite with each other and create something of real value to help.”

To kick off the new site, Markdown’s first offer is a $20 voucher on Chocolate.com that will cost consumers only 10 bucks.  Included in the description of the deal itself is information on which items shoppers can use their voucher for on the chocolate marketplace and a section detailing how buying from Chocolate.com supports both American values and entrepreneurs.

Markdown’s second promotion, which will run later this week, is for identity theft protection vendor LifeLock.

There’s motivation to spread the word about Markdown.com as well – any shopper that refers friends to a specific deal automatically gets 10 percent off their own purchase price for every referral to a shopper who also takes advantage of the deal.

Frankly, we’re not quite sure what to make of all this.  The biggest reasons why daily deal sites have become so popular is that they target wide segments of the population and offer an enormous variety of promotions for those shoppers to choose from.

At least from what we can tell, Beck’s site does neither and actually goes in the complete opposite direction.  It seems to be catering to a very specific audience (those consumers who will, presumably, only buy from companies that share their particular socio-political ideas) with a very narrow range of offers.  By the Beck’s own admission, the site may only be able to offer one or two deals a week as a result of partnering only with select companies and retailers.  And can you really say with any confidence that left-leaning shoppers, even those who put a high value on buying from reputable and ethical companies, will be rushing to support an e-commerce venture by Glenn Beck?

Then again, Beck’s got a loyal following of his own that he can tap into and may have enough numbers to make this variation of the daily deal work.  Only time will tell.

But what do you think?  Is Markdown the next “it” thing in daily deal offerings or will it flame out even before Beck signs off Fox news for the final time?  Leave us your thoughts and comments below.

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PC Mall Adds Daily Deal Offering to Discount Site

Posted in Ecommerce, Online Shopping, tagged , , , , on May 13, 2011 | 1 Comment »

We had a brief lull in daily deal news items going there for awhile.  Well, so much for that!

PC Mall this week has announced its entrance into e-commerce’s hottest new arena with a little twist.  Rather than launching a completely new daily deal resource, the electronics and computer retailer will be expanding its current discount site, OnSale.com, to include special offers and promotions for shoppers in their local areas.

The service will begin in select local markets, unspecified at the current time, before expanding to cities around the U.S.

“We are very excited about OnSale’s prospects as it expands into this emerging market which, fueled by the social web, has quickly evolved into an important growth channel for merchants,” said Frank Khulusi, PC Mall CEO.  “We have been working for some time to develop what we believe is an innovative, unique value proposition to both merchants and consumers.”

PC Mall seems to be banking on its reputation among shoppers with its decision to just extend the capabilities of OnSale instead of undertaking the costly and time-consuming process of building and launching an entirely new daily deal site.

“Unlike other competitors in this space, OnSale has been an online e-commerce merchant for over 10 years.  As a result, OnSale can offer consumers the opportunity to leverage rewards programs that provide them significant discounts on computer and consumer electronics products, not just discounts on other third-party coupons,” Khulusi said.

While the implementation may be a bit different than what we’ve come to see during the recent rush to get into the daily deal business, the basic nuts and bolts of OnSale’s new features are more or less consistent with the likes of Groupon and others.

Shoppers will be able to buy discounted offers at OnSale.com for anything from spa services to apparel to restaurant deals and then redeem the voucher, called an OnSale Coupon, with businesses and merchants in their local area. Those interested can sign up now at OnSale to begin receiving special offers via email, Twitter and Facebook. Participants will eventually be able to share deals with friends and accumulate reward points when those friends take advantage of the offers.

Leave us your thoughts and comments!

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Google Offers Arrives

Posted in Ecommerce, Online Shopping, tagged , , , , on April 22, 2011 | 1 Comment »

Shoppers in Portland will be the first to get a crack at trying out Google’s long-awaited entry into the daily deal arena, as the search giant this week has launched a sign-up page on its site for Google Offers.

As part of the service’s beta testing phase, Google Offers will soon also be expanded to include New York City and the San Francisco Bay Area as well.  But for now, the City of Roses gets to enjoy guinea pig status for a program that promises daily deal discounts of at least 50 percent.

“We picked Portland because it’s a city known for its unique local businesses, great restaurants, interesting places and a thriving, active community,” according to the help page for Offers.

While shoppers in all three metropolitan areas can now sign up to receive Google Offers, it’s not clear when Google  will actually begin emailing the deals to those who do sign up, even in Portland.

As the help section goes on to say:  “We’re working hard to get Google Offers up and running in Portland.  Soon you’ll  start receiving e-mails with great local offers if you have signed up with Google Offers.”

So technically speaking, at least to us, this is the very softest of soft launches.

Nevertheless, the introduction of Offers is a clear signal of intent by Google that it’s serious about jumping into the growing daily deal business, one that some have estimated could generate up to $2.67 billion in sales this year alone.

It also shows that Google’s failed attempt to buy Groupon last year for somewhere around $6 billion was a mere  hiccup in the broader plan to bring daily deals into its package of e-commerce services that already includes Google  Product Search.

If we’ve got any readers out in Portland, we’d love to hear from you and find out if you’ve already signed up for  Google Offers as well as what you think so far.  Feel free to leave us a comment!

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Leadership Change Coming at Groupon

Posted in Ecommerce, Online Shopping, People, tagged , , , , , , on March 23, 2011 | Leave a Comment »

Looking for an exciting, executive-level e-commerce job? Polish up your resume folks and keep your eyes on those want ads because Groupon is ditching its president and chief operating officer in the next few weeks.

The daily deal site announced this week that Rob Solomon, who’s held the post at Groupon for just over a year, will be stepping down.   No specific reason was reported for Soloman’s departure, though he will be retained as a company advisor after he leaves.

“Rob Solomon joined Groupon just over a year ago, doing what he once considered unimaginable and relocating his family from ‘God’s Country’ in Woodside, CA, to Chicago, bringing his experience as a seasoned Internet executive to help us turn Groupon into the next great technology company,” said Groupon CEO Andrew Mason “Now, Rob is moving on, taking his family back to God’s Country.”

(Editor’s Note: one of us has been to Woodside and unless something’s changed, hearing it called God’s Country is truly baffling. Anyway, we digress…)

In all seriousness, Soloman’s departure is pretty baffling as well, at least on the surface.

In the 12-plus months that he was on the job, Groupon saw enormous growth, to say the least.   The company expanded  from about 200 employees to nearly 6,500, expanding its daily deal offerings to 44 different countries after initially only running a U.S.-based operation and becoming the preferred daily deal resource among most shoppers.

“Rob has added enormous value to Groupon and we’ll miss having him around,” Mason continued.

Enormous value indeed, but the leadership change comes at a crucial time for Groupon.  The company hasn’t exactly had the best year thus far thanks to some glitches with a few of their discount offers that caused a couple of public relations headaches.

Meanwhile, both Groupon’s main competitor (LivingSocial) and an increasing number of internet players like Google and Facebook are either building up their own daily deal offerings or starting their own deal programs to compete directly with Groupon and grab a share of the top spot in the industry.   It’s an industry that could generate upwards of $6.1 billion in sales over the next 3-4 years, according to recent studies.

We’ll let you know who replaces Soloman as soon as we find out about it. In the meantime, we welcome your thoughts and comments!

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Bing Jumps into Daily Deal Business

Posted in Ecommerce, Online Shopping, Retail, tagged , , , , , , on March 7, 2011 | Leave a Comment »

If you can’t beat ‘em, join ‘em!

That seems to be the thinking over at Microsoft at least, which late last week decided to throw its hat into the daily deal ring with a new feature that adds daily specials to search results on Bing.

Bing Deals will weave more than 200,000 different offers into search results for consumers, including gift certificates and discounts, as well as daily and local deals from sites such as Groupon, LivingSocial and Restaurant.com.  Microsoft teamed with The Dealmap, which consolidates local deals on its own web site, to build the new service.

The new feature certainly seems like an attempt by Microsoft to capitalize on the buzz and potential that daily deal sites have come to represent in the last 12-18 months but Bing Deals also falls in line with the search engine’s broader goals of search simplicity and effectiveness.

“Bing’s mission is to help you cut through the clutter of the Web to make decisions more quickly,” says Andy Chu, director of product management in a post on Bing.   “Once you find the deal you like, you can save it, share it with a friend via e-mail or claim the deal directly with the deal provider.”

Bing Deals will be accessible for mobile shoppers as well as traditional computer users.  When a shopper runs a search for a specific product or even a restaurant on Bing, a green icon will now appear below the search listing, indicating that the business is currently offering users a special offer.  Clicking on the link opens up the deal to the user, and links will continue to feature a host of information on the particular business, from reviews to images to maps.

iPhone and Android users will get a more substantive version of the feature when they use their devices—Bing’s mobile home page will include a direct link to deals for those consumers and clicking on the link opens up all of the daily deals available in that particular consumer’s immediate geographical region or metropolitan area.

Analysts seem to think that the new feature won’t do much to help Bing close the gap on Google for search dominance. Since Groupon rejected its’ substantially offer to buy late last year, Google has started developing its own daily deal service that will compete directly with Groupon and others.  Microsoft’s approach, however, appears to be one of partnering with the daily deal giant rather than going after it directly.

Got some feedback?  Leave us a comment below.

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ShopSavvy and Groupon Team Up

Posted in Ecommerce, General News / Technology, tagged , , , , on February 24, 2011 | Leave a Comment »

Daily deal giant Groupon has partnered with bar code-scanning application developer ShopSavvy on a new program that will deliver local and personalized Groupon offers exclusively to the more than 10 million consumers who currently use the ShopSavvy application.

The move further enhances Groupon’s ever-expanding lineup of mobile applications and email-able offers that has rocketed the company to the top of the daily deal industry.

“We are pleased to be partnering with ShopSavvy, one of the leading mobile shopping platforms,” says Mihir Shah, Groupon’s mobile vice president and general manager. “This partnership brings exciting opportunities for mobile shoppers looking for offers relevant to their buying interests.”

ShopSavvy’s app, which is available to both iPhone and Android users, will now include a special Deals tab that will operate a bit like Twitter—providing a steady stream of special deals, coupons and promotions to users.  The app personalizes offers based on a user’s geographical location, as well as their own shopping history and user ratings.

Groupon plans to add additional specific targeting measures in the coming months.

“ShopSavvy plans to enhance Groupon’s value for our users by sending them only the deals we know they will be interested in, based on their shopping history, location and preferences,”  says ShopSavvy co-founder Alexander Muse.

The Groupon component is just one of several upgrades on the newest version of the ShopSavvy 4 application, which now includes a price-matching function that informs a shopper if another retailer would match a competitor’s listed price, as well as a detailed inventory feature and expanded review/ratings content capabilities.

ShopSavvy boasts that the application was downloaded more than two million times back in November before the big holiday shopping push, marking the most robust month for the app since it was originally launched.  Teaming up with Groupon, however, could result in an even higher number of new users in the future.

For Groupon, the partnership adds to its own mobile app library and the 50-plus million consumers who receive deals via email.

Leave us your thoughts and comments on this new alliance below!

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Groupon’s Valentine’s Day Snafu

Posted in Ecommerce, Online Shopping, tagged , , , , on February 16, 2011 | 1 Comment »

As it turns out, ascending to the much-desired status as the new IT thing in e-commerce in recent months hasn’t meant smooth sailing for Groupon.

The daily deal site finds itself in damage control mode right now after a Valentine’s Day coupon offering that the company put together with florist FTD resulted in more than a few ticked off consumers.  The situation highlights, at least to some degree, that partnerships between daily deal sites and retailers are not yet an exact science, despite how popular these kinds of offerings have become.

How did this particular PR nightmare come about?

Groupon originally offered consumers a voucher for $20 off any FTD flower purchase of $40 or more, just in time for Valentine’s Day.  The problem arose when those who used the coupon discovered that the arrangements they bought using the Groupon offer were actually listed as lower-priced sales items on FTD.com.  A separate FTD page that Groupon’s users were directed to in order to use their coupon listed those same arrangements at a higher price, which essentially negated any discount the Groupon users would have gotten.

Shoppers complained that FTD was jacking their prices in a most unfavorable manner and now both companies are scrambling to refund them.

While very apologetic, FTD doesn’t appear to be willing to admit to any wrongdoing.   The company’s president Rob Apatoff said that the offer with Groupon plainly stated that the discount did not apply to sale items.

“For those who already purchased items that were on sale on FTD.com at the time of your purchase using your Groupon, FTD will issue an automatic refund for the additional savings,”  Apatoff said in a statement.

It is believed that Groupon sold approximately 3,000 of the vouchers.

It hasn’t been a good 2011 overall for Groupon, even before this snafu with FTD.   The company took a ton of heat for a series of controversial Super Bowl TV commercials that several critics asserted was offensive to the people of Tibet. Groupon also had to apologize to Japanese customers last month after a promotion featuring the traditional New Year’s meal of osechi went awry as well.

Of course, all of this could have the people over at Google thankful that Groupon rejected their substantial buyout offer at the end of 2010.

If any of you were involved in the Groupon/FTD mess, we’d like to hear from you!

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Guest Submission: Are Daily Deals Sites Sustainable?

Posted in Ecommerce, Guest Articles, Retail, tagged , , , , , , on January 26, 2011 | 2 Comments »

By Mark Armitage, SocialShopping.com

The recent proliferation of daily coupon sites online has been nothing short of phenomenal. Spearheaded by the likes of Groupon and LivingSocial, these daily deals sites have proved wildly popular both with consumers and local businesses looking to attract them to their stores.

However, the trend has not been without its critics; from bungled deals and disgruntled customers to accusations of diluting brands’ value from some business owners, it seems hardly a day passes without a new story hitting the headlines.  So what are the pros and cons of the coupon site model and is it really sustainable for retailers and ultimately their customers?

Let’s take Groupon as an example.

Founded in 2008 and running their first deal in October of that year, the business has grown to offer over 50 million registered users daily offers on everything from pizzas to fitness classes in more than 250 cities worldwide. Having declined a reported acquisition offer of $6 billion from Google in November of last year, they have more recently announced that they have raised fresh investment of almost one sixth of that ($950m) from a number of high-profile backers – a remarkable show of faith in such a young company.

It’s not hard to see why daily deals sites appeal to consumers. Discounts of up to 90% represent great value, plus assuming you are subscribed to several of these services where you live, you have a considerable choice of fun activities every single day.

However, not every deal runs smoothly.  A common problem experienced by retailers has been that the extra demand generated by a promotion on a site such as Groupon can be difficult to manage, which in turn has lead to dissatisfactory service and customer complaints.  A recent instance of this arose in Tokyo when a local café was unable to deliver 500 orders of a traditional New Year’s meal to Groupon subscribers either on time or in satisfactory condition, leading to their CEO Andrew Mason having to issue a subtitled apology to Japanese subscribers via YouTube. When Groupon launched their biggest national deal in the US for the Gap in August of last year, the demand crashed their server.

If these mistakes are forgivable for a young company growing more rapidly than even its founders could have anticipated, there are also more fundamental problems from some retailers’ perspectives. Although Groupon’s model guarantees the company running the offer a certain number of customers per deal, by the time they have offered the initial discount for customers and paid Groupon their cut of 40-50% of the coupon’s face value, many businesses have found that the actual profitability of such deals has been well below their original expectations.

Moreover, some industry analysts have accused coupon sites of breeding a “don’t buy culture” amongst consumers.  The theory goes that subscribers become so accustomed to getting everything at a discounted price that they may refuse to return to stores except when they are offering deals.  Linking this back to the math which local businesses have to do when calculating how many new customers they need to bring in to generate a profit from a daily deal, it’s not hard to see why some might make the mistake of underestimating this figure and end up feeling short-changed.  This is the same logic which has led many online retailers to shun voucher code sites which they see as catering only to bargain hunters as opposed to potentially loyal customers.

So what does all of this mean for the future of daily deals sites and the retail landscape as a whole?

It would be foolish of me to say that Groupon’s business is going to head south anytime soon; if figures recently quoted in The Wall Street Journal are to be believed, demand for Groupon’s services is so high that they currently have to turn down 7 out of 8 approaches from local businesses.

Sooner or later, though, I believe that there will be a backlash from some retailers who may then seek alternative solutions to bring customers into their businesses. Rather than effectively paying twice –once for the discount for customers and again for the commission to the coupon site – savvy business owners may instead seek smaller platforms which charge less or even nothing at all.  Even if these other  distributors do not have the same reach as Groupon, the retailers may be willing to compromise this in exchange for a better profit margin and a more predictable customer flow.

Furthermore, these same business owners may start to question how they can attract a more brand-loyal and hence, more valuable breed of customer than those who subscribe to the likes of Groupon.  Online retailers with the financial resources to do so may look to introduce features such as Facebook integration which will give them access to their customers’ interests and habits. Interpreted correctly, this can then enable them to offer deals specifically targeted at these users.

For smaller or local businesses, though, this may seem a lot of work for no guarantee of success. Ultimately, what many retailers really want is the opportunity to ask consumers directly what it is that they want.  This is where not just Facebook but a new generation of tailored platforms which combine social networking elements with a means to interact with self-proclaimed shopping fans may come in.  And if they can do so in a controlled environment without charging prohibitive commissions – or even offer the service for free – this may hold the key to a more sustainable business model for retailers of all sizes.

Mark Armitage is Director of Marketing Communications for Socialshopping.com, a new online shopping network and community which brings together thousands of shopping fans looking for the best tips and bargains both online and whether they love.  Socialshopping offers an open technology platform which allows consumers and shops alike to create pages and share information about their favorite brands and products.

For more information, visit http://www.socialshopping.com/ or contact Mark directly at mark@socialshopping.com.

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