More on Group Deals and Prescience

Seems like I was on the mark in my blog in July about the huge volume of one day type web sites and that people will quickly get sick and tired of the bombardment of deals. So many of us today are getting huge numbers of time wasting emails, offering us everything from holidays to lucky dip bags. A story in Ad Age Digital this morning says that the trend is now definitely heading downwards in the US.

Yelp, is cutting down its Yelp Deals staff in half as outlined by CNN today and Facebook announced this week that they are shutting down Facebook Deals after originally suggesting that they were going to make huge inroads into Groupon’s business.

Just to reiterate, the problem isn’t the deals. The shear number of sites offering daily deals and bombarding consumers is a fad and most, as I predicted will quietly disappear as they find there is too much competition and they can’t make a profit or reach critical mass for a harvest or sale. As I have already said, retailers aren’t making money from these deals (generalisation) and where they do use the deals to get people into their premises, they don’t seem to be coming back for a second visit once they have their deals.

I will shortly come back to the new strategy that has much more potential to generate positive cash flows for all concerned which is off course location or  proximity based marketing. There will of course be a spate of these and many of the same developers will be jumping on the bandwagon, but they will find that it is much harder than they think and they will struggle to get many retailers on board for reasons I have discussed previously.

All is not lost and proximity based marketing / check ins has huge potential. However it is something that takes an understanding of destination business, game theory, loyalty, what people actually need and want, knowledge about location based services and much more. Areas that we can help with. Get it right and this is a huge business opportunity for all, get it wrong and people will be turned off and it will take much longer to achieve the results that we are predicting.