Are Consumers Tiring of Daily Deals?
Adweek takes a closer look at the crowded field of Daily Deals, quoting Forrester analyst Sucharita Mulpuru-Kodali saying LivingSocial and Groupon are not too big to fail. "The daily deals space is saturated and it never provided tremendous value to merchants. And that was the fundamental flaw in the business model. They've survived over the last few years even when these truths were obvious because they’ve reduced the margins they ask of merchants, they extend the length of offers and they make more offers available at any time."
Cumulus has put a lot of time and investment into its Daily Deal program SweetJack. The company says the advantage it has over other companies is hundreds of radio stations to help promote the product and established relationships with local advertisers.
The Adweek article says daily deals have been on a cold streak. "LivingSocial dismissed 400 employees last November after suffering a net loss of $560 million during Q3 2012. In its Q3 '12 earnings, Amazon blamed its first net loss in four years on its $169 million write-down for its two-year-old stake in LivingSocial."
The article goes on to say, sources familiar with the company say they wouldn't be surprised if the industry’s No. 2 player was sold to a larger company or liquidated piece by piece by spring 2014. "Even worse for this nascent field, the marketplace has gotten a lot more crowded. Dozens of outfits from Yelp to marketing giants such as American Express and Bank of America—to even companies that enable retailers to set up their own offers—now provide innovative ways to link customers with local merchants."
Read the entire Adweek article HERE
(3/11/2013 11:22:47 AM) |
Daily Deals programs have always been "advertising" for morons. Since there are a lot of morons out there, there are plenty of programs. And all the buzz words from agencies about "metrics", "social media" and the like, shows that is the next fad. They have no concept on how consumers make buying decisions. Pepsi threw all their money into "Social Media". They are now the number 3 soda and they are back in "traditional media".
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