Consumers have an innate love for bargains. This is what fueled the success of the couponing industry and daily deals, as evident by the recent entrée of Groupon in the IPO arena. However, this same move is causing them distress as the emerging industry faces growing pains, settling into its own. But Groupon is not giving up the fight so easily. They have sought help and support from new ventures and gimmicks. But are these measures enough to save the couponing industry from deeper woes? Here’s a look at the latest trends in the couponing space.
Clicky, the clickable value-wheel, is Groupon’s new marketing instrument. Using Facebook log-ins, users can spin the wheel and score potential discounts from the available choices.
Mike Bennett, Clicky, the Clickable Value-Wheel lead developer was honest about the reality that grips this new endeavor, but he is still optimistic about the outcome.
“The chances of winning are slim, but not impossible. We designed the wheel to spin in a way that appears random – like you could potentially win on any given spin – but it’s not actually random, it’s programmatically predestined to ‘win’ 1 out of 1,000 times.”
Clicky is just one of the strategies that Groupon will test over time. It will be introduced in the American markets in the coming months, along with other marketing experiments.
The boom of mobility triggered a lot of uprising in other industries, including daily deals. Mobile marketing has been an instrument for companies like Groupon to promote daily offers, discounts and vouchers. Countless users were reached by these types of initiatives. Thus, generating immense revenues.
Groupon recently forged an alliance with Deustche Telekom to accelerate local business deals and offerings. The latter’s products and services will also be distributed by the former.
Heikki Makijarvi, Senior Vice President Business Development at Deutsche Telekom excitedly shares details on this joint venture:
“Groupon is one of the global leaders in the online and mobile commerce business. Our partnership with Groupon allows us to strengthen our stake in this rapidly expanding and exciting new market segment, while diversifying our portfolio and accelerating our time to market for innovative products and services at the same time.”
There have been talks that aside from this, Groupon has already acquired Campfire Labs to enhance their social media capabilities.
The IPO Dilemma
Groupon’s competitive pack continues to thin as they begin to acknowledge mistakes organization has made along the way, especially pre-IPO period. While their strong debut gave other daily deals companies high hopes, the situation now has uncovered the glaring risk factors, as reported by Bloomberg. Groupon’s margins are already on shaky ground, and the cost of merchant acquisition is starting to spike over time. In fact, almost half of those who have offered daily-deal-promos have already dismissed doing this again in the next six months.
Herman Leung, a Susquehanna analyst based in San Francisco briefly explains the situation:
“People are scrutinizing it a little more because of all the merchant feedback. About 76 percent of the merchants plan to do zero or one deal over the next six months. They’re seeing sufficient demand on their own as the economy is getting better.”
The adulation of daily deal savants have perpetrated the success of companies like Groupon and Living Social. Accel Partners were one of the most victorious among others. Their investments grew largely when they placed bet on the daily-deal site Groupon, which has been creating a strong alliance through Facebook.
Even if things are not panning out well for Groupon now, several businesses have joined the daily deals bandwagon. MobStub, a new daily deal site launches a twist to the usual route and is targeting a larger market. They are adding some 5-12% discounts for positive social media activity including Facebook “likes” or tweets. There will be a two-layer of discounts: the first discount will be received upon sharing their site in Facebook or Twitter and the second when they like the featured brand in these social networking sites.
A couponing solution is not limited to social networks, and this could be a good point of diversity for the industry moving forward. Recently, FutureLogic’s PromoNet installed couponing option in Casino MonteLago. This will be the second casino in Las Vegas to adopt the technology.
Daily deals have earned enormous publicity for both the right and wrong reasons. While Groupon’s slip maybe an indicator of a bigger dilemma, they are counting on their old partners, mobility and social networks to rebound.