Group buying site Spreets has shed most of its staff hot on the heels of job losses at competitor LivingSocial, but analysts say the $500 million daily deals market is not imploding, just consolidating.
Analyst firm Telsyte said over the past few years the daily deals market in Australia had been whittled down from 80 to 40 sites to today’s position where the top eight – Groupon, Scoopon, LivingSocial, Cudo, Spreets, Deals.com.au, Ourdeal and Ouffer – generate 95 per cent of the industry’s revenue.
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Group Buying is a BIG DEAL!
Unlimited enthusiasm with a healthy dose of entrepreneurial spirit have helped launch a Gold Coast Based group buying enterprise
In the fast moving and highly competitive world of electronic “daily deals”, Joe Brown has almost reinvented the wheel.
His Voupons venture has enlisted dozens of businesses on the Gold Coast and offered hundreds of deals to potential customers in a new take on e-marketing and group buying.
The 34 year old says Voupons is different from a string of other popular daily deal buying programs as it doesn’t take a cut of any merchant profits and is free for the shoppers.
“We have positioned ourselves as an alternative to the other Daily deals” says Brown.
“shoppers only pay when they buy the product and business don’t have to hand over a % of their profits”
Brown concedes the daily deals market is crowded.
Well-known American based operations like Living Social and Groupons churn millions of dollars of potential sales leads each month.
But the industry also is weathering a backlash from some traders and patrons who have begun to question the effectiveness of some e-marketing campaigns promoted by some daily deals sites.
Billy Tuckers, former CEO of Australian group buying website Cudo, recently warned business about the lack of control in daily deals marketing.
He cited the example of a small Australia resort that signed up to a promotion deal as was overwhelmed when three million responses flooded in from around the world. The resort was unable to honour the published offer to the majority of interested parties.
Brown, who has been working on his project for four years, insists the Voupons system is different and simple.
He says if customers looking on the Voupons website see a deal they like, they can request an SMS message be sent to their phone, which they take to the store to claim the deal. Businesses pay for the service by buying SMS credits.
Brown has also developed an iPhone application for Voupons that went live about three months ago. The system as gathered in excess of 600 download.
He is now working on a add-on that will activate a beeping noise on the phone if a customer walks within a certain radius of a Voupons affiliated shop.
Brown wants to take Voupons Australia wide, but knows establishing a solid base on the Gold Coast is imperative before expanding too fast.
“ We want to focus on getting results for our customers here. Once we get those results we will look to expand,” he says.
Voupons client Leighton Breen from Govs Coffee in Miami says Voupons provide good value to his business. “I looked at using the daily deal sites but I didn’t want to give away half my profit,” says Breen.
“I hear that there are so many deals and they don’t get much repeat business as the consumer just moved on to the next deal, with Voupons the clients pay me direct.
“This means I don’t need as many sales and make more profit”