Group Buying
The Daily Deal
Phenomenon
Melissa de Andrade
@MelissadAndrade
Check my Social Media blog: melissadeandrade.com
What is a Daily Deal website?
Sales tactic that uses
collective buying power
to offer
limited time discounts
that are valid only once
a certain number of
vouchers are sold
Voucher Price |
Discount |
How many bought |
Time left |
Rules |
melissadeandrade.com
Group buying is a strong business
But...
INDUSTRY
Oversaturated
The daily deal aggregator Yipit now sifts through
30,000 deals a month from some 650+ daily deal sites
MERCHANTS
Not always profitable
56% of businesses made money from daily deal promotions, while the rest either
lost money (27%) or broke even (18%)
CUSTOMERS
May be suffering from daily deal overkill, Groupon remorse or daily deal regret
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If group buying is
oversaturated,
how to
differentiate?
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Personalization is the key!
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melissadeandrade.com
Focused on small, good brands for moms
- $150 million in revenue expected this year
- 4 million members and 40,000 units sold from 700 different items a day
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Focused on deals for men
- Bring relevant deals to subscribers
- Bring audience that’s relevant to merchants
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What about the
merchant?
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Not Always Profitable for Merchants
75% off deal on a dozen cupcakes
Expected a few hundred orders
8,500 people took the deal
They lost thousands of dollars
Each sale meant a $4.50 loss
They had to pay $19,000 for
extra staff and shipping charges
for the 102,000 cupcakes.
melissadeandrade.com
If group buying is not
for every
business, how should
one know?
melissadeandrade.com
Some hints to consider
Group buying brings:
Big advertising boost
Increase visibility
Exposure to many new customers
A way to test a new product or
service
 Extra inventory can be moved
quickly.




Group buying can be part of
your marketing strategy but it
should not be ALL your
marketing strategy
melissadeandrade.com
Enhancing Groupon experience for the merchant
Challenges
Recommendations
Groupon does
Build loyalty yourself!
not build loyalty - Build a unique experience for Groupon people
- Use social! Motivate them to follow you on Twitter or like you on
Facebook for further promotions
- Use social! Ensure they provide positive feedback on social media
tools. Group buying is a tremendous opportunity for positive ratings
Groupon buyers Offer you own discounts!
are bargain
- Have an additional product with special price for Groupon people
shoppers
- Offer 50% off to bring in someone new (who will pay either full price
or a slightly reduced price)
Groupon does
not make
financial sense
Evaluate and negotiate!
- Think: Is Groupon for your business?
- If so, use marketing budget to invest in group buying
- Push daily deal services to accept a smaller cut of voucher sales
- Shorten the redemption period, so that the business can plan carefully
for the rush of new customers
- Offer loyalty programs via text message, email, Twitter, Facebook
melissadeandrade.com
Promote Deals yourself!
Voucher Price | Discount | How many bought | Time left | Rules
melissadeandrade.com
References
Group Buying White Paper - Harvard Business
Schools
http://www.slideshare.net/HackStartups/groupbuying-white-paper
Considering Offering a Groupon? Read This First.
http://socialmediatoday.com/jgibbard/337550/co
nsidering-offering-groupon-read-first
Group Buying: Key To Your Business's Social
Media Strategy
http://www.huffingtonpost.com/robertball/group-buying-is-key-to-yo_b_802560.html
Beyond Groupon: Daily Deals Evolve, New
Competitors Emerge
http://www.huffingtonpost.com/2011/11/23/gro
upon-daily-deals_n_1088436.html
Group Buying Versus Traditional Lead Generation
http://www.huffingtonpost.com/robertball/group-buying-versus-tradi_b_813552.html
Retail Software: Your Groupon Advisor
http://blog.softwareadvice.com/articles/retail/ret
ail-software-your-groupon-advisor-1072911/
Pros and cons going Groupon
http://socialmediatoday.com/carolinejorgensen/379110/pros-and-cons-going-groupon
Groupon: winner or goat
http://socialmediatoday.com/drewmclellan/2638
68/groupon-winner-or-goat
Google Offers vs Groupon vs Facebook Deals
http://www.digitaltrends.com/socialmedia/google-offers-vs-groupon-vs-facebookdeals/
Will Groupon really boost your local business
http://www.socialmediaexaminer.com/willgroupon-really-boost-your-local-business/
Group buying local business
http://mashable.com/2011/01/20/group-buyinglocal-business
How daily deals are losing their allure for business
and consumers alike
http://moneyland.time.com/2011/08/30/howdaily-deals-are-losing-their-allure-for-businessesand-consumers-alike
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