It’s marketing, it’s e-commerce, and it’s coupons, too. Daily deals sent electronically are a new type of business, and they appear to be catching on locally.
On Nov. 15, Groupon.com joined Livingsocial.com, 417 Magazine’s Deal of the Day and KY3’s HalfPriceOzarks.com as an everyday discount option for eager retailers and bargain-hunting consumers in the Springfield area.
E-deal Web site Groupon.com was named the fastest growing Web company ever by Forbes magazine in its Aug. 12 edition. Since starting in Chicago in November 2008, Groupon has attracted 35 million subscribers in 35 countries, said Groupon spokeswoman Julie Anne Mosler. According to Chicagobusiness.com, Internet search-giant Google is considering a $6 billion buyout of Groupon.
Mosler said the early results in Springfield have been encouraging and typical.
“Springfield now has about 17,000 subscribers, and we are adding several hundred every day,” Mosler said on Dec. 1.
While details may vary among the e-coupon programs, the idea is the same: Discounts become possible with high volume sales. Anyone in the e-mail or subscriber pool can buy the day’s deal, but the offer won’t be guaranteed until a minimum number of sales is met.
The discounters negotiate the services and pricing with local and national businesses in advance, typically splitting the purchase price of the deals. If the minimum number is not sold, the coupon buyers are refunded. But, if the number is met, businesses have to honor the deals.
Mosler said deals through Groupon – a nod to “group coupons” – last for months after purchase, but the sale window is limited.
“We set up the structure the same way every time – the deal is only available for one day,” Mosler said.
Matt Lemmon, digital director for Springfield-based Whitaker Publishing Inc., said he was aware of the concept for several months before the company kick-started its Deal of the Day program July 1.
“We spent about two-and-a-half months ramping it up and loading up with deals. This had been on our radar for awhile,” Lemmon said, noting that Whitaker Publishing’s 417 Magazine selected Overland Park, Kan.-based Bring Local to run its transaction system.
And it’s paying off. Lemmon said the program has generated revenues of $10,000 to $15,000 per month after transaction fees.
417 Magazine has 15,000 subscribers who receive an e-mail notification of its daily deal. Lemmon said another 5,000 consumer are exposed to the deal on its Facebook page. The subscribers pay nothing – unless they want a deal.
Laura Killingsworth, of Springfield, said she is a fan of 417 Magazine on Facebook, and that’s how she was introduced to its service.
“I just bought 13 bagels and cream cheese from Einstein Bros. for $7,” Killingsworth said via e-mail. “I haven’t used that one yet. I’m saving it for when I have more people to feed.”
She also has paid $10 for $20 to spend at each Skinny Improv and Big Whiskey’s Bar & Grill.
Killingsworth said her Big Whiskey’s tab after applying the coupons was only $2.
Gretchen Graff, co-manager of Bodhi Salon at 431 S. Jefferson Ave., agreed to be featured with Groupon on Nov. 30. She said the company offered haircuts, plus blow-drying for $15, which are normally priced at $30. There was a minimum number of 15 to be sold. Groupon sold 62.
“There wasn’t any money out of pocket for us,” she said. “We’re a small business, and we can’t really afford to advertise. Even those people who didn’t buy got to see our name.”
Graff said Groupon and Bodhi split the sales evenly, with the store receiving $7.50 per coupon, or $465.
Mosler said the company works with local merchants to get the deepest discounts possible for its subscribers.
Mosler declined to provide revenue figures for Groupon, but said the company meets or exceeds its minimums more than 95 percent of the time.
According to www.groupon.com
, the coupons are typically not available to use until the day after they’re featured to allow companies shelter from the masses on the featured day and to answer potential customer questions.
Bambu Vietnamese Cuisine, 1338 E. Battlefield Road, was the first Springfield business featured through Groupon on Nov. 15. A minimum of 20 coupons needed to be purchased, and 125 were sold by day’s end, owner Nguyen Huynh said.
Killingsworth said she likes that the coupons are good for several months. She is saving the Skinny Improv tickets for a special night out.
“I can see myself totally getting hooked on this thing,” she said. “They have really good businesses participating – stuff that I would use or like to use but couldn’t justify the expense.”
The international Livingsocial.com program also offers deals to people and businesses in the Springfield area. The deals are available for one day only, and signing up for e-mail notification is free, according to its Web site.[[In-content Ad]]