A short e-book by Sqoot.
Daily Deal
Facts, Stats, & Quotes
1. Loco for Local 2. Deals 1.0
3. G is for Groupon 4. Feeding Frenzy
5. I Did it all for the Deal, C’mon 6. Deals 2.0
7. Capitalizing on Daily Deals
Table of Contents
3 6 8 16 22 31 36Loco for Local
“Online2Offline Commerce is a trillion dollar opportunity.”
“Local media predicted to be $145 billion by 2014.”
“80% of discretionary income spent within 10 miles.”
5
“In the past year, 23 million Americans —
10 percent of the adult population — purchased a coupon from an online site such as Groupon or LivingSocial."
“The daily deal market is expected to surpass $15 billion by 2015.”
“Similar to the display ad stack, a local ad stack is developing.”
Deals 1.0
2007 2008 2009 2010 2011 2012 ‣ Groupon Founded
‣ Group Commerce, Yipit, Local Offer Network, Chompon and Sqoot founded
‣ Groupon rejects $6 bn offer by Google ‣ ~$2 bn raised
‣ ~30 deal sites acquired
‣ 100+ deal sites shut down
‣ MSN, Amazon, AT&T, Yelp, Google, NYTimes, and AOL launch deals
‣ Facebook launches and kills deals
‣ Google buys deal aggregator, DealMap, shuts down their API
‣ Groupon IPO ($18 bn)
‣ Angie’s List IPO (~$1 bn)
‣ ~700 deal sites
‣ Yelp IPO (~$1 bn)
‣ LivingSocial IPO (rumored)
‣ LivingSocial founded
‣ 8Coupons founded
7
‣ Adility founded
G is for
Groupon
9
“Yes, Groupon is growing faster than
just about any company ever."
143
m
subscribers, acquired for as much as31
bucks a pop, purchase deals from3,500
eager sales representatives.local merchants, thanks to
250
k
11
“On August 19, 2010, we emailed and posted a Groupon daily deal offering $50 of apparel at Gap for $25 to 9.2 million subscribers across 85 markets in North America.
We sold approximately 433,000 Groupons in 24 hours, generating over $10.8 million in revenue.”
=
12 Sources: Eloqua+
=
+
290
k
new users200
k
new users13
Base Salary of Groupon CEO,
Andrew D. Mason
$180,000
$575
Sources: Groupon
“At his own recommendation to the compensation committee,
Mr. Mason’s base salary for 2011 was reduced to $575.”
14
Post-IPO Pricing Valuation (billions)
$20
$15
$10
$5 $25
15
Fastest to $1 Billion
Source: Forbes 1 1.5 2.5 4 4 6.5 8 8 12 13 19 23 25 40 Gary Winnick Eric Lefkofsky Jeff Bezos Mark Zuckerberg Sean Parker Sergey Brin Larry Page Bill Gates Daniel Och Warren Buffet Henry Ford John D. Rockeller Ray Dolby Jay WalkerFeeding
Frenzy
“Google, which famously offered to buy
Groupon for $6 billion and was rebuffed,
ponied up $100 million for The Dealmap.”
18
“Google acquires Clever Sense, creator of
local recommendations App Alfred.”
“In a twist, Google reviews Zagat,
and decides to bite.”
19
“Groupon acquires e-commerce
‘big data’ startup Adku.”
“They did it all for the data:
Groupon buys Hyperpublic.”
“Groupon buys Pelago in bid to
20
“ReachLocal buys DealOn, plans ‘Deals Exchange.’”
“BuyWithMe bought by Gilt.”
“Rearden Commerce raises $133 mm, buys
group commerce company HomeRun.”
21
Funding (millions)
$600 $400 $200 $800Source: Silicon Valley Insider
$1,200 $1,000 Groupon LivingSocial Gilt Zulily fab Bloomspot Dealfind BuyWithMe
I Did it All for
the Deal, C’mon
23 Source: JiWire
How Far are People Willing to Travel for a
Discount on a $100 Item?
50% Off Free 75% Off 1 Hour 60% 40% 2 Hours 72% 28% >2 Hours 69% 31% 10% Off 15 Minutes 45% 55%24
4%
27%
31%
38%
Who’s Buying All These Deals?
Source: ForeSee Results Survey, March 2011
Loyal customers Brand new customers New customers Existing customers, swayed by the discount Other
25 42%
58%
of businesses cite
customer acquisition as the top reason for liking daily deals.
Source: Merchantcircle Survey, June 2011
42%
58%
Deals Drive New Customers, Right?
of businesses cite
customer acquisition as the top reason for not offering deals again.
48%
52%
20%80%
26
of merchants enjoy working with daily deal companies.
Sources: Susquehanna/Yipit
Thank You, Sir, May I Have Another?
of merchants plan to not feature
27 Source: ConsumerSearch.com and The About Group Research, June 2011
Are Deal Buyers Coming Back?
47%
53%
32%
68%
returned to the establishment even without another discount.
28 Source: Rice University Survey, June 2011
Do Deals Work for Business Owners?
67%
33%
52%
48%
said they would offer anotherdaily deal.
29 Source: Technomic Research (Food Industry Research Firm)
What About Deal Buyers at Restaurants?
33%
67%
said they returned to the restaurant where they had previously used a daily deal.
52% 48% were new customers.
17%
83%
ended up recommending the restaurant to family or friends.
The deal buyers for Groupon, LivingSocial, Travelzoo, & BuyWithMe:
77
%
spent more than the deals value andof those folks became repeat customers.
20
%
Deals 2.0
“It’s obvious that publishers have clear advantages in ‘social commerce’ and should be using these assets
to start curating commerce for their audiences.”
“Deals are just another ad form and ultimately don’t need to be in a newsletter to work for the end consumer.”
“Mobile advertising fucking sucks...”
33
“As expansion and fragmentation continue,
flexible and intuitive aggregation tools may be a godsend for deals’ recipients.”
“Technology is emerging to support the total collapse of the historical media channel model of
“The flood of entrants into the space has
resulted in consumer deal fatigue with
subscribers inundated with a plethora of daily
deal emails... We’re now seeing many businesses
evolve their distribution models... This shift has
favored publishers and media companies with
more powerful assets than an email list.”
“Deal commerce, which is embryonic today, will evolve into an increasingly powerful and personalized commerce
experience, with the potential to pose the first true alternative/complement to Google AdSense.”
“...eBay, Microsoft, Yahoo and Zynga display, promote and distribute our deals to their users. We intend to continue to
expand our business with strategic acquisitions and business development partnerships.”
Capitalizing on
Daily Deals
Increase monetization, improve
local relevance, & keep users
engaged with our deal API.
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