$15 billion by 2015.â âSimilar to the display ad stack, a local ad stack is developing.â ... âGoogle acquires Cl
50
Daily Deal Facts, Stats, & Quotes
A short e-book by Sqoot.
Table of Contents 1. 2. 3. 4. 5. 6. 7.
Loco for Local Deals 1.0 G is for Groupon Feeding Frenzy I Did it all for the Deal, C’mon Deals 2.0 Capitalizing on Daily Deals
3 6 8 16 22 31 36
1
Loco for Local
“Online2Offline Commerce is a trillion dollar opportunity.”
“Local media predicted to be $145 billion by 2014.”
“80% of discretionary income spent within 10 miles.”
4
“The daily deal market is expected to surpass $15 billion by 2015.”
“In the past year, 23 million Americans — 10 percent of the adult population — purchased a coupon from an online site such as Groupon or LivingSocial."
“Similar to the display ad stack, a local ad stack is developing.”
5
2
Deals 1.0
‣ ~700 deal sites ‣ Yelp IPO (~$1 bn) ‣ LivingSocial IPO (rumored)
2012
2011
‣ Group Commerce, Yipit, Local Offer Network, Chompon and Sqoot founded ‣ Groupon rejects $6 bn offer by Google
‣ Adility founded
2010
‣ ‣ ‣ ‣ ‣ ‣
2009
‣ ‣
‣ Groupon Founded
~$2 bn raised ~30 deal sites acquired 100+ deal sites shut down MSN, Amazon, AT&T, Yelp, Google, NYTimes, and AOL launch deals Facebook launches and kills deals Google buys deal aggregator, DealMap, shuts down their API Groupon IPO ($18 bn) Angie’s List IPO (~$1 bn)
2008
2007
‣ LivingSocial founded ‣ 8Coupons founded
7
Sources: CrunchBase, 8Coupons
3
G is for Groupon
“Yes, Groupon is growing faster than just about any company ever."
9
143m 31 250k 3,500
subscribers, acquired for as much as
bucks a pop, purchase deals from
local merchants, thanks to
eager sales representatives.
10
Sources: WSJ, Groupon
=
+
“On August 19, 2010, we emailed and posted a Groupon daily deal offering $50 of apparel at Gap for $25 to 9.2 million subscribers across 85 markets in North America. We sold approximately 433,000 Groupons in 24 hours, generating over $10.8 million in revenue.”
11
=
+
290k new users
+
=
200k new users
12
Sources: Eloqua
Base Salary of Groupon CEO, Andrew D. Mason $180,000 “At his own recommendation to the compensation committee, Mr. Mason’s base salary for 2011 was reduced to $575.”
$575 2010
2011
13
Sources: Groupon
Post-IPO Pricing Valuation (billions) $25
$20
$15
$10
$5
14
Source: Silicon Valley Insider
Fastest to $1 Billion 1
Jay Walker
1.5
Gary Winnick
2.5
Eric Lefkofsky 4
Jeff Bezos
4
Mark Zuckerberg 6.5
Sean Parker 8
Sergey Brin
8
Larry Page 12
Bill Gates 13
Daniel Och 19
Warren Buffet 23
Henry Ford 25
John D. Rockeller 40
15
Source: Forbes
Ray Dolby
4
Feeding Frenzy
“Google, which famously offered to buy Groupon for $6 billion and was rebuffed, ponied up $100 million for The Dealmap.”
17
“Google acquires Clever Sense, creator of local recommendations App Alfred.”
“In a twist, Google reviews Zagat, and decides to bite.”
18
“Groupon acquires e-commerce ‘big data’ startup Adku.”
“Groupon buys Pelago in bid to expand user discovery.”
“They did it all for the data: Groupon buys Hyperpublic.”
19
“Rearden Commerce raises $133 mm, buys group commerce company HomeRun.”
“Eversave acquired by Affinion Group for $30 mm.”
“ReachLocal buys DealOn, plans ‘Deals Exchange.’”
“BuyWithMe bought by Gilt.”
20
Funding (millions) $1,200
Groupon
$1,000 LivingSocial
$800
$600
$400 Gilt
$200 BuyWithMe
Dealfind
Bloomspot
fab
21
Zulily
Source: Silicon Valley Insider
5
I Did it All for the Deal, C’mon
How Far are People Willing to Travel for a Discount on a $100 Item? 10% Off
45% 55% 15 Minutes
50% Off
75% Off
60%
40%
1 Hour
28%
72% 2 Hours
Free
31%
69% >2 Hours
23
Source: JiWire
Who’s Buying All These Deals?
Brand new customers
31% 27%
Loyal customers
Existing customers, swayed by the discount
4% 38%
24
Other
Source: ForeSee Results Survey, March 2011
Deals Drive New Customers, Right?
42%
42%
58%
58%
of businesses cite customer acquisition as the top reason for liking daily deals.
of businesses cite customer acquisition as the top reason for not offering deals again.
25
Source: Merchantcircle Survey, June 2011
Thank You, Sir, May I Have Another? 20%
80%
48%
52%
of merchants enjoy working with daily deal companies.
of merchants plan to not feature a deal in the next six months.
26
Sources: Susquehanna/Yipit
Are Deal Buyers Coming Back? 32%
68%
47%
53%
returned to the establishment even without another discount.
went on to become regular customers.
27
Source: ConsumerSearch.com and The About Group Research, June 2011
Do Deals Work for Business Owners?
52%
48%
33% 67%
said they would offer another daily deal.
were uncertain.
28
Source: Rice University Survey, June 2011
What About Deal Buyers at Restaurants? 52%
48%
were new customers.
67%
said they returned to the restaurant where they had previously used a daily deal.
33%
17%
83%
ended up recommending the restaurant to family or friends.
29
Source: Technomic Research (Food Industry Research Firm)
The deal buyers for Groupon, LivingSocial, Travelzoo, & BuyWithMe:
77%
spent more than the deals value and
20%
of those folks became repeat customers.
30
Source: Rice University Survey, June 2011
6
Deals 2.0
“It’s obvious that publishers have clear advantages in ‘social commerce’ and should be using these assets to start curating commerce for their audiences.”
“Mobile advertising fucking sucks...”
“Deals are just another ad form and ultimately don’t need to be in a newsletter to work for the end consumer.”
32
“As expansion and fragmentation continue, flexible and intuitive aggregation tools may be a godsend for deals’ recipients.”
“Technology is emerging to support the total collapse of the historical media channel model of how promotions reach consumers.”
33
“The flood of entrants into the space has resulted in consumer deal fatigue with subscribers inundated with a plethora of daily deal emails... We’re now seeing many businesses evolve their distribution models... This shift has favored publishers and media companies with more powerful assets than an email list.”
34
“Deal commerce, which is embryonic today, will evolve into an increasingly powerful and personalized commerce experience, with the potential to pose the first true alternative/complement to Google AdSense.”
“...eBay, Microsoft, Yahoo and Zynga display, promote and distribute our deals to their users. We intend to continue to expand our business with strategic acquisitions and business development partnerships.”
35
7
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