To save daily deals, get rid of 'daily'

It's no secret that Groupon, the daddy of daily deals apps, is struggling. The company's stock, which debuted in an IPO WHEN, is down 88% since and both operating income and sales were down in the quarter ended September from the previous quarter, not what investors want to see form a "growth" company. Groupon's leaders have responded with a radical step: turning the daily deals model into a digital storefront for discounts that don't expire tomorrow. For Groupon the change comes with huge risks to its cachet and brand identity, but whether the shift is warranted remains to be seen.

   

Groupon rode to its IPO on a wave of sales growth and enthusiasm from the online advertising community. The Chicago-=based company had done what Google, Facebook and Yahoo! largely hadn't: created an online ad model perfect for small, local businesses without millions to spend on banner ads or the expertise or need for search=based campaigns. That Groupon needed thousands of actual salespeople combing the U.S., banging on doors and signing up local entrepreneurs, just reinforced how different Groupon was from the Silicon Valley giants (what's more revolutionary in the age of social media than hiring physical human beings to make face-to-face sales?).

But as the market for one-off discounts has become saturated and the glam of buying a spa day at 50% has waned, Groupon has suffered. The new model looks far more like traditional coupons than the type that Groupon and others such as Living Social pioneered just two years ago. The new site will feature more or less permanent coupons in a searchable, sortable format. On the one hand that means Groupon will be competing with everyone else in the retail discount space, from shopping search engines such as Shopzilla to Google Shopping to offline operations such as Val-pak . On the other hand, Groupon may be making a smart play by converting its brand, sales force and relationships with tons of local businesses into a more sustainable model that takes share from those competitors, none of whom have managed to establish themselves with smaller businesses the way Groupon did.

For us shoppers it's a mixed bag: if you thought 75% discounts on high-end restaurants were too good to last, you were probably right. On the other hand, you may soon be able to quickly identify that the best deals in your neighborhood are not at big box chains, but the mom-and-pops you've been overlooking for years.

http://allthingsd.com/20121115/goodbye-to-daily-deals-groupon-emphasizes-always-on-deals/