Crystal Ball

posted by on 2012.09.25, under Group buying, Private buying

Daily Deal logos

While browsing the web this weekend, I happened to stumble upon a “full Monty tank driving experience.” For just a couple hundred pounds, I too could be the proud pilot of 4 different military vehicles including a nuclear missile launcher as well as try my hand at shooting different weapons. Once the initial series of exclamations and interjections had passed, I sat down and got ready for a new week at the office with somewhat of an issue to overcome. I already had a blog post done and dusted for the beginning of the week, but my idea for today’s article “5 ways to get great discounts from retailers using only a tank” had been turned down. Armed only with youth and lots of free time, I decided to brainstorm with the team and ask: Where is the market going?

We wrote about this in an article back in January. Our predictions were mainly spot on with a development of the major players and a stronger focus on customisation. Recent figures show a long-term slowing down in the growth of the daily deals market. Projected to grow by 86% this year, figures will likely fall to 23% next year and single digits in the years after. This market came to light in 2008 with the emergence of Groupon and its rapid expansion into a multi-billion pound company. Merchants had the ability to run offers with no upfront cost and benefit from the voucher company’s marketing strength. With the emergence of strong competition from players such as Living Social and KGB deals, merchants can now choose from a wider source of partners, but also benefit from the laws of supply and demand to pay out a lower commission to the voucher company. With declining revenue and an increasing number of institutions looking to share the cake, the voucher industry has no choice but to take one route: diversification.

For the average consumer, this path has 2 outcomes. First of all, it means that there is going to be an increasing diversity in offers available. Whereas the market was previously service focused with spa days, restaurants and experiences, there is now an increased availability of goods. This means, you’ll be seeing an increasing number of retailers partnering with deals aggregators (our fashion section is a good example of this). Travel has also experienced a massive surge with the development of websites such as Secret Escapes offering high discounts on exotic holidays and destinations closer to home offering hotel breaks at lower prices.
Another development is an increased demand for mobile. Voucher websites are often unfriendly for mobile navigation and though Scotland may be an attractive destination, most people just want to know what kind of deals they can easily access instantaneously. In an ultra-connected society where individuals are used to instantaneous communication and deliverability, it is necessary to implement a solution which removes the difficulties around this and can provide a hub for deals navigation.

However, this evolution does not only benefit the consumer. Indeed, a recent survey demonstrated that a quarter of small businesses were seriously thinking of running a deal within the next 6 months. What this translates into for the voucher companies is an increased base of businesses. Following the trend of diversification of revenue streams, companies are now offering an increased array of B2B services to these businesses and, in most cases, giving preferential terms to those who have already run deals with them. Whether it be payment processing, mobile redemption or assistance with business processes, once a company runs a deal they are effectively a new prospect for upselling. Considering the size of voucher companies, this means that small businesses may effectively end up outsourcing or at least collaborating with these larger companies to benefit from an expertise that may be too expensive to implement at store level.

That’s why we’ve been working on aggregating an increasing number of partners and expanding the offerings available to you. As our regular users have seen, there has been constant evolution on our website as we work towards making Buyometric your natural hub for offers around the web. We hope your experience continues to be as seamless as possible and welcome your feedback, so drop us an email and we’ll be happy to see what we can do for you.

When I’m not studying or conceiving ways to drive a tank into Harrod’s, you can contact me on m.elboudi@buyometric.com or LinkedIn.

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