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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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Survey Data Reveals Pluses, Minuses of Daily Deal Trend

Posted in Ecommerce, Online Shopping, tagged , , , , , on June 20, 2011 | 1 Comment »

We all know just how profound an impact Groupon, Living Social and the daily deal sites that followed them have had on the online shopping world.  But despite the meteoric rise in popularity, is the daily deal model not without some negatives?

According to a new survey, the answer is yes, though the results still resoundingly point to a continued rise in the use of such sites.

PriceGrabber just rolled out its Local Deals Survey, which polled nearly 2,100 online consumers in the U.S. between May 20 and 25 about their daily and local deal shopping activity.  Primarily, the research substantiates the notion that daily deal sites are increasingly becoming a preferred method of shopping online: 44 percent of respondents say they regularly use or search a daily deal website, while 63 percent of consumers admitted they receive offers from two or more deal sites each day.

As we’ve come to expect, the motivation behind the widespread use of daily deal sites is pretty obvious—saving money. More than three-quarters of respondents (78 percent) indicated they buy local deals to do just that, while only 19 percent cited the ability to try out new services that would otherwise be outside their price range.

However, in a telling sign that points towards oversaturation, 52 percent said they feel overwhelmed by the volume of special deal emails they receive each day.  Meanwhile, 60 percent indicated they believe the daily deal industry has become overcrowded with too many sites.

“Whether we are in the depths of a recession or the height of a booming economy, consumers are looking to save money— period,” said Graham Jones, general manager of PriceGrabber.  “The daily deals sector clearly shows promising signs for long-term growth, but the data reinforces the frustration consumers can feel when a new trend explodes so quickly.”

PriceGrabber asserts that frustration underscores the need for a more streamlined approach to the daily deal process, and the company itself believes it has a solution.  It recently launched a new one-stop service that aggregates daily deals from up to 20 local deal websites and gives consumers more control over how many deal emails they receive.

Still, even with some blemishes, the daily deal industry is sitting pretty right now.  In addition to the obvious benefit of saving money, shoppers love daily deal sites for their social networking angle too.  The survey finds that 86 percent of respondents tend to share deals they find with friends and family.  This sharing takes on all forms: 71 percent said they do so via word of mouth, 64 percent chose email and 26 percent share it through Facebook.

What are your thoughts on the current state of daily deal shopping? 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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Facebook Becomes the Latest Daily Deal Player

Posted in Ecommerce, Facebook Commerce, Online Shopping, tagged , , , , , , , , , , , , , , , , on March 15, 2011 | Leave a Comment »

You almost have to feel a bit sorry for the folks over at Groupon.  We certainly wouldn’t blame them for feeling like there’s a bulls-eye on their collective backs.

After all, since November of last year (a mere 6 months ago), a number of tech heavy hitters like Yahoo, eBay, and Bing have all pledged to get into the daily deal business and to take a slice of the pie from Groupon.  And that’s not even counting Google’s own aggressive daily deal aspirations, which have accelerated quickly since Groupon turned down a hefty purchase offer from Google during that time as well.

Well, now you can add another big name to that list of companies:  Facebook.

Continuing its gradual expansion into all things e-commerce, Facebook has announced that it will be expanding its current Deals program to start offering consumers exclusive online deals.  Shoppers will be able to buy daily-deal vouchers on Facebook itself and share them with their Facebook friends under the new program.

Facebook will use its own in-house sales team to solicit special offers from merchants and retailers.  But the social networking behemoth has brought on some partners and will be aggregating special offers from nine other sites as well: Gilt City, Home Run, KGB Deals, OpenTable, Plum District, Pop Sugar City, Tippr, Reach Local and Zozi.

By integrating its own special deals with that of the 9 partner groups, Facebook should be able to ensure a pretty regular selection of daily deals that can compete with the likes of Groupon and Living Social.  If you’re wondering why the competition in the daily deal arena has amped up as much as it has in recent months, consider a recent report from media researchers BIA/Kelsey that predicts the industry could be generate as much as $6.1 billion in U.S. sales alone by 2015.

Facebook will initially roll out the new service in only 5 cities – Dallas, Austin, Atlanta, San Francisco and San Diego.

“Local businesses (there) will be able to sign up to use this feature soon, and people will be able to find Deals in the coming weeks,” said a Facebook spokesperson.

The current version of Facebook Deals already lets businesses offer incentives and discounts to consumers, but only those who check-in through the Facebook Places service.

So there you have it.  Yet another entrant into the daily deal rat race.   Leave us your thoughts and comments below!

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LivingSocial Brings in Former Walmart Executive

Posted in Ecommerce, People, tagged , , , , , , , on January 10, 2011 | Leave a Comment »

Flush with cash and better positioned than ever to make a run at Groupon for dominance in the daily deal/featured product shopping market, LivingSocial has made another big splash as part of its continuing evolution.

The company has named John Bax, a former e-commerce executive with Walmart, as LivingSocial’s new chief financial officer.

“We’re excited to bring John’s fantastic track record and diverse background in all things financial to the team, as well as a solid reputation among the financial community and a deep understanding of LivingSocial’s business,” says Tim O’Shaughnessy, LivingSocial’s CEO and co-founder.  “We are confident he will contribute to our company’s continued growth and stability.”

The hiring comes on the heels of last month’s $175 million investment that LivingSocial received from web giant Amazon.

At the time, competition in the daily deal site arena was at a fever pitch. Industry news sources were abuzz with Amazon’s investment package and the rumored $6 billion investment by Google in Groupon that preceded it.  Though the Google deal never materialized, those frantic few weeks highlighted just how popular daily deal sites have become with consumers and how many big e-commerce names were quickly moving to snatch the leading ones up to add to their own offerings.

Now, with the holiday shopping season behind us, it appears that the competition among daily deal sites is going to be heating up throughout 2011 and continue to be a major story in e-commerce news this year.

Bax arrives at LivingSocial having most recently served as the chief financial officer at RecycleBank, a New York-based company that runs a retailer-funded rewards program where consumers can earn points simply by recycling household goods.  He held the CFO position at Sentient, a private travel firm, prior to that.

Bax’s time at Walmart preceded both Sentient and RecycleBank, where he first worked as a vice president of planning and analysis for the chain’s brick and mortar locations before taking over the Walmart e-commerce position.

Got a new hiring or promotion you want the e-commerce industry to know about? Send it to us and we’ll give it some coverage!

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