Wednesday, June 15, 2011

Another daily deal site goes live

The proliferation of daily deal sites is continuing in Charlotte, with the newest entry, CharlotteConnoisseur.com, going live today.

Daily deal sites (if you've somehow avoided being bombarded by news about them), have exploded in popularity, with hundreds popping up in the wake of industry leader Groupon's 2008 launch.

The business model is pretty simple: Sites sign up users and merchants, getting merchants to offer their goods or services for 50% off or more. They email those offers to their users, who buy coupons for those radically discounted prices. Merchants and the sites split the revenue, with the theory being that merchants reap the benefits of dozens or hundreds of new customers to offset the discount hit to their bottom line (typically at least 75%, after they split proceeds with the site).

A search for "Daily deals Charlotte" turns up dozens of the sites, ranging from national players such as LivingSocial (which recently expanded its Charlotte sales force) and Half Off Deals to more local names such as Charlotte on the Cheap and Charlotte Access. Local media companies have also jumped on the bandwagon, with the Observer and the Charlotte Business Journal recently starting daily deal offers.

Here's how Charlotte Connoisseur describes itself on its Facebook page: "CharlotteConnoisseur is a team of Charlotte locals, socialites, business owners, fashionistas and critics who love the group coupon craze and want to perfect the model on a local level. We vote on the best local businesses and only offer deals from the ones who make our cut."

Many observers have raised questions about the long-term viability of such sites, and some merchants have complained that the sites cost too much and train customers never to expect to pay full price. Groupon's IPO, one of the most-anticipated, has drawn plenty of fire, such as this article, "Groupon IPO has gall." The story essentially points out that Groupon has lost $540 million since its inception and doesn't predict when it might turn a profit.

What do you think - will the sites succeed? Have you used any? What was your experience like?

6 comments:

Anonymous said...

Just what every small business needs - to give a free meal to hundreds of people who will never again expect to pay a fair price for anything. Recipe for disaster.

Anonymous said...

http://blog.agrawals.org/

Read some of those blog entries, the "deal sites" won't be around long.

It's not the best idea to devalue your brand time and time again. People start to think that maybe your product is overpriced to begin with.

Anonymous said...

a lot of places are over priced to begin with

Anonymous said...

There's no such thing as a free lunch.

Anonymous said...

I just bought a "deal" in which you have to make a reservation and let the vendor know you are using the voucher. Ironically, when I called they had space open until I mentioned using the deal. Then when they came back on the line I was told they were booked for the next two weeks...

Anonymous said...

So when you use a coupon at a restaurant or anywhere then you expect every time you return each time that you'll not have to pay full price ever again?? I'm glad I'm not the server or manager at that place that has to deal with you lol