Daily deals 1: The bandwagon careers on
Jinfo Blog

By Tim Buckley Owen

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As the top summer holiday season approaches, it doesn’t take much of a leap of the imagination to visualise hordes of people heading towards restaurants, bars and coffee shops, eager to take advantage of the latest daily deal. Yet all may not be well in the daily deals business, as a number of recent warnings to both participants and investors indicates.

As LiveWire has observed, there’s been a bit of a renaissance recently for the tired old world of local business listings. Continuing that story, the veteran but troubled Yell Group has now launched its new four-year strategy, focusing on its transformation from simple small & medium sized enterprise advertising provider to local eMarketplace leader, offering new marketing services such as co-branded affinity cards.

Yell has also announced two new strategic alliances.  Its partnership with social commerce solutions specialist Bazaarvoice should enable it to offer powerful social media applications to smaller businesses, while its deal with Microsoft means that it will be able to offer its customers cloud-based search, mobile and local advertising solutions.

Elsewhere, in the United States, the long-established map and location specialist MapQuest has announced the beta launch of its own new Local Business Center, including premium promotional listings. But it’s in daily deals that the big excitement continues to reside.

Among recent announcements, the California-based online local media company Local.com has just acquired the Screamin’ Media Group, which operates its own Screamin’ Daily Deals service – while online textbook rental company Chegg has launched its own Brand Partnership programme which includes daily deals (follow links to 26 May). Meanwhile large scale provider LivingSocial continues to chase the market leader Groupon (and gather its own customers even more closely in) by launching new “fully curated social events” in 30 countries under its LivingSocial Adventures brand.

It certainly seems there’s still everything to play for. Recent surveys from yet another provider, the Experian-owned PriceGrabber, reveal that 44% of respondents say they use or search daily deal sites, while 59% plan to use them when shopping for presents during the 2011 holiday season.

These findings come with a health warning of course: the 2,000-odd US online consumers that PriceGrabber polled would be expected to have a predisposition to seek out daily deals anyway. More importantly, though, over half felt overwhelmed by the sheer number of “bargain boasting” emails they received on a daily basis.

As LiveWire has been warning for some time, one problem with the daily deals model is that it’s easily replicable, so there’s no guarantee that any one provider will predominate, however successful initially. But the seeds of destruction of this fast-blooming industry seem to be planted even deeper than this. More to follow.

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