Daily Deals Lack Context...
The aggressive growth of Social Networks and eCommerce have created a commerce experience that truly orientates itself around the customer. Customer profiling, analytics and open graph integration have power businesses such as Amazon, eBay, ESPN, BBC, and many more. Creating unique customer experiences contextualised to the demographic, interests and network of an individual customer. Opening Amazon.com shows a visitor suggested products, raises the profile of product categories that likely appeal to the user and even suggest daily deals that predict a customers likely next purchase. Marketers have adopted a new philosophies such as 'The Segment of One.' So why is it Daily Deals companies like Groupon still haven't adopted the theories of contextualisation? I love the idea of daily deals, particularly on my mobile. I would make a daily effort to browse bargain opportunities. Get my car detailed at a 50% discount, custom tailored shirts at a fraction of the usual price, or a massage special. But what frustrates me is the experience. I have to scroll through dozens of make-up, cosmetic surgery, hair salon or slimming therapy discounts. Why does Groupon, JigoCity, etc not know that I am married Australian male in my thirties? Plenty of other services today can do it, Amazon has been doing it online since the Dot.Com boom. The lack of customer understanding results in a disenchanted consumer who is increasingly less likely to return. The digital customer of today expects a simpler experience, expect suggestions, but most of all expect a service offering to demonstrate a level of understanding. In my opinion, all the daily deals companies are struggling for this reason. No customer understanding.
The most likely reason for this limited offering comes from the industries heritage. Daily deals come from a advertising background in 'Flash Deals'. Limited time offers for consumers to take advantage of a short term discount. Previously broadcasted through Television or Direct Mail, offers would incentivise immediate calls to action. The idea was to attract new customers while de-risking cash flow. Daily deals in an eCommerce world grew aggressively during the 2009 financial crisis as consumers hunted for bargains and businesses were keen to attract new customers, while adding the supposed attraction of group buying. The economics of the business borrowed from the advertising industry, based purely on broadcast volumes, e.g.. number of subscribers, emails, clicks, etc. The idea of targeted offers wasn't on the radar.
Who will prosper in the daily deals space? I believe the answer is really straight forward. Success will come by building in customer understanding that leverages all the information customers are willing to share.Whether its demographic, sociographic, geographic or behavioural, the opportunity to engage the customer in a richer, deeper engagement all exist today. To succeed service offerings need to offer value to encourage consumers to browse, value comes by demonstrating that a the service has deals that appeal to the individual. Think Amazon's Suggested products, only the suggestions are regular and targeted.
Only once daily deals offerings offer context will they start hitting their target, and create a sustainable business model. Great smarter, more targeted.