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BizReport : Ecommerce archives : October 02, 2012

Why daily deals will continue to be important for holiday shoppers

A new forecast from BIA/Kelsey group indicates daily deals are continuing their importance for small businesses across the US. One expert believes the daily deal holds promise not only for shoppers but for businesses over the upcoming holiday season. Kristina: What is the draw of this type of advertising for a local business?

by Kristina Knight

John Vitti, CMO and Co-Founder, Mobile Spinach: Local merchants have become increasingly savvy about the way they spend their ad dollars. They are tired of spending money on advertising they can't track. They like to see a direct impact. Online deals give them that. The industry is still trying to figure out the right way to create a deal that works for both merchant and consumer. The best practice here is to really study and understand the merchant's business economics.

Kristina: What are your top 3 tips for creating a deal that will 1) bring in customers and 2) keep the businesses on the mind of that consumer?

John: For building customer loyalty, it's not about offering the biggest deal possible. The most important tip is make it relevant, relevant, relevant. Consumers are willing to take smaller discounts on deals from merchants they care about, are nearby, and have what the consumer is looking for at that time. For example, don't just email me about a 50 percent off horseback riding deal. I'd rather find out that a restaurant near my office is having a $5 off lunch deal that I can use with my coworkers right away. Small discounts are great if the merchant and its offerings are a good match for the consumer's needs.

Kristina: There has been some backlash from some businesses, stating that daily/online deals aren't helping them create a loyal, returning customer base. How can brands begin converting one-time-deal shoppers into returning customers?

John: As I've said, the relevance of the deal is paramount. Offering consumers the right incentives is the first step. A consumer feels the most special when they get a free drink or free new appetizer that a chef is trying out. Consumers love those little things and tend to talk about them with peers after the fact. For deals platform providers, it's important to respect the merchant's margins and price points - this will result in a happier merchant. It's about an incentive, not a takeover of the local merchant's price points. Deals companies often fail to see this.

Kristina: Do you expect online deals to play an integral part in the upcoming holiday shopping season? Why/why not?

John: I do think online deals will play a role this coming holiday season. Offers, deals and coupons are not going away. And as shoppers increasingly turn to their mobile devices for local merchant and product information - something that is predicted particularly during the holiday season - we'll see more deals and offers delivered and redeemed via mobile devices. Some merchants don't think they need to promote during the holiday season, as consumers are there and ready to shop. Others believe they must offer promotions to rise above the noise and motivate shoppers to come to them. The bottom line is that online deals need to evolve and start respecting the merchant by becoming more relevant and aligned with margins. This holiday shopping season will be a good test of how online deals are evolving.

Tags: daily deal trends, daily deals, ecommerce trends, holiday 2012 trends, Mobile Spinach

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  • MedTech Catalyst

    I like the relevancy point as if a deal is convenient and has perceived value, it will hopefully continue an existing relationship or create a new one. With that said, we are empowering consumers to create their own deals or join others that meet their needs at Flash Purchase.



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