It all started with McDonald’s and the supersize trend. The objective? Take ordinary portion sizes and grossly enlarge them for an additional cost. Other fast food companies were close behind them. Similar to this is the recent Groupon epidemic, as lots of different companies vie for their 15 minutes of daily deal fame. Groupon pioneered, and is now synonymous with, the daily deal movement but there are many more jumping on the bandwagon. Newspapers like the New York Times and the San Diego Union Tribune are joining in, and some are making more money with deals than with interactive advertising http://bit.ly/m7qDY7. Magazines are considering it too, but conglomerates with lots of titles and national advertisers appear to have more success with it. Google has launched one it is currently beta testing, starting with Portland, OR of all places, called Google Offers http://bit.ly/dHoOMe. Perhaps the most similar to Groupon, Google Offers delivers deals via email. Packaged goods have even gotten in on the action, with General Mills being the first one to ever launch a deal http://bit.ly/jkMamb. Other websites are also following suit and find it generates more interest because the audience is already more interested in the product category and not just in the deals. Facebook is also launching a similar but more social approach with free ‘Facebook Deals,’ otherwise known as ‘check-in deals,’ to distinguish it from ‘Social Deals’ where Facebook Credits or money is needed to purchase the deal http://selnd.com/mN2h7J. What does this mean for Groupon and LivingSocial? How will this trend play out?
Well, if the supersize trend is any indication, market saturation is always a possible outcome. The flip side to this is that there will be a deals site for every kind of consumer known to mankind and it will become the norm with the expectation that every company has one. Another way this could play out is that Groupon and/or LivingSocial buys up all of or most of these deal sites and monopolizes the trend. No matter how it plays out, Groupon and LivingSocial will always have the edge because they have the revenue to expand globally and are doing so as others enter the game. Perhaps the biggest challenge to any deals site is overcoming the ‘one night stand,’ as when a user visits once to purchase a deal rather than becoming a repeat customer. If companies can figure out how to do that then they are on their way to building longevity for themselves in this endeavor. One way to do this is by starting a loyalty program that builds on daily deals outside of the online world http://bit.ly/jkMamb. Another way to do this, and probably how Google Offers will find success, is by signing customers up to receive updates on deals via email. As the saying goes: ‘out of sight, out of mind.’ By capitalizing on this and the persuasion principle of repetition, in this case placing a deals site and its deals in front of consumers’ faces over and over, a deals site stands to gain a loyal following. Should every company launch a daily deals site? Probably not. There are some industries where it is simply not applicable, such as the financial industry. It is all a matter of gauging whether it is a fit for your audience and then, if it is, working to make it pay off in great dividends for you and the brand you are promoting. You may not have a say in how the trend fares over time, but you do have a say in how it affects you and your brand. Use it wisely and it may have a great payoff. The choice, and the power, is in your hands.