Recently a new kind of e-commerce business model has emerged websites like Groupon and LivingSocial. These 'deal-of-the-day' websites offer printable coupons which can be used at various local businesses.
These companies work as middle-men, providing small businesses a way to reach a broader audience. It increases consumer awareness of businesses and offers an incentive for them to try new products or services. Groupon, in particular, is experiencing enormous growth, partly because of a massive marketing budget, and also because it offers users an extremely useful service.
As e-commerce nears its online limitations, these deal-of-the-day companies are breaking new ground by finding creative ways for consumers to connect online purchases with real-life results. For example, as discussed in class, there are certain things consumers do not want to purchase on the internet. Some clothing items, food, and other similar things are generally purchased in the real-world, where consumers can touch, taste, and smell them.
On Groupon, consumers can purchase cheap coupons for restaurants and retailers, and then go shopping at their real-life location to get what they need. This is part of the reason why they are experiencing enormous growth.
Source: comScore
There are other reasons why consumers are finding daily-deals websites so useful. Groupon and LivingSocial both will find deals most relevant to the user with the use of targeting techniques. They generally ask for your zip code, gender, and age, and then offer you deals they have determined are most appealing to your demographic. This allows the companies to maximize their reach to the demographics that matter the most to them, as well as giving consumers a 'personalized' experience.
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