Is the daily deal market dying?
Rob Go, co-founder of NextView Ventures, a seed-stage investment firm, wonders what's gone wrong with the daily deals market. Go says that there's so much "fatigue" around daily deals in the SMB market, it's hard for anyone to come out ahead.
“The price of admission into this opportunity is consumers engagement. Groupon and its competitors embarked on a land grab, amassing as large a list as possible in as many regions as possible. In theory, the larger the list, the better the opportunity for targeting and yield management.
But, something has gone wrong in this market. And I suspect this is a case where the best companies in this space are victims of the model’s success. As a result, Groupon, LivingSocial and others have been able to raise monstrous amounts of capital. The general press (enabled by services like Yipit) is able to track with pretty good accuracy what the scale is of the various competitors and their relative growth rates. This puts massive pressure to continue to grow lists and grow revenue. And the best way to do that is to call on brand new businesses, convince them to offer massive discounts, sell as many coupons as possible, and move on.”
Tips for Running Daily and Local Deals | Extranet Factoring 9:22 pm on September 23, 2011 Permalink |
[...] quite extensively over the last year or so. In fact my colleague Eric Markowitz has reported on the death of daily deals (and their resurrection) in the last few weeks. As a business owner, what are some practical [...]
Tips for Running Daily and Local Deals | Tagtype 11:03 pm on September 26, 2011 Permalink |
[...] quite extensively over the last year or so. In fact my colleague Eric Markowitz has reported on the death of daily deals (and their resurrection) in the last few weeks. As a business owner, what are some practical [...]