Street Fights of 2012: The Battle Over SMB CRM | Street Fight

Off the Block

Street Fights of 2012: The Battle Over SMB CRM

0 Comments 28 December 2012 by

After two years of watching siloed firms like Groupon explode, 2012 saw a shift in how companies approached the hyperlocal market. Business-to-business plays, particularly in the marketing space, emerged as a more efficient alternative to the early pioneers. Part of what drove the switch was (and is) the bringing together of small business tools — everything from customer acquisition services like deals to more internal products like payments — into a “connected” small business infrastructure.

Groupon’s stock price might be the most telling weather vane marking the transition. Shares of the daily deal giant were in free fall throughout 2012, dropping nearly 80% over the course of the year. The company’s accounting scandals and PR blunders only underlined the fact that its core business was grinding to a halt. After two years of massive growth, Groupon’s local segment grew by less than one-quarter of a percent in Q3 compared to a year earlier.

By chasing a red herring in e-commerce, Groupon watched knowingly as its first-mover advantage in local dissolved and its window to upsell merchants on affiliate services slammed shut. Start-ups often start with a wrong, or short-lived strategy, and pivot their way to success, but Groupon made a habit of saying the right thing and doing another.

“Today, Groupon is a marketing tool that connects consumers and merchants,” CEO Andrew Mason wrote in letter to shareholders in May. “Tomorrow, we aim to move upstream and serve as the entry point for local transactions.”

That has yet to happen and as Groupon hesitated, start-ups and legacy players alike began to connect the dots on a local marketing space that saw customer acquisition and loyalty beginning to fuse with a once-impenetrable payment processing space.  A host of payment-connected loyalty start-ups popped up early in the year with Belly’s nabbing $10 million in funding from Andreessen Horowitz to lead the pack.

The most notable push, however, came from a host of connected-payment providers that looked to use inexpensive mobile payment processing tools as a way to position themselves at the heart of the purchase loop. Among the start-ups, Square led the way. It began its push beyond payments with the introduction in June of a digital punch card, a rudimentary but important product for the company. By early fall the company has secured a massive partnership with Starbucks, as well as a whopping Series D round, which valued the company at $3.25 billion.

On the legacy end, Intuit and eBay aggressively developed their own local solutions. Two weeks after snapping up AisleBuyer to buttress its mobile payments service, Intuit spent nearly half a billion to acquire Demandforce to serve as the local marketing component of a small business suite that brought together inventory (Quickbooks) with payments and marketing.  Meanwhile, eBay continued to push PayPal’s mobile product but it was the integration of location-based advertising network Where into PayPal Media Network, and the launch of eBay Now, a same-day delivery service, that shows some of the big potential for the company in local.

Steven Jacobs is deputy editor of Street Fight.

Related: Street Fights of 2012: The Mobile Search for Local Discovery

Denver — March, 5th, 2015
Learn from the pros, network with partners and clients, and ski! Don't miss our second annual event on this important topic.
Register now and save!


Get hyperlocal industry headlines in your inbox every morning. Subscribe to the Street Fight Daily newsletter.

Free White Paper: Contextualization

Learn how to deliver better, revenue-driving consumer experiences. Download "Contextualization: Leveraging Location-Based Technology and Mobile to Drive Success for Brands."

Sponsored by Artisan Mobile.

Follow Us

Get the latest Street Fight news, information and analysis via Twitter and Facebook.

The Fight Hits Home (Services)

We spoke recently with the founders of some of the hottest startups looking to cash in on a massive opportunity in home services. Check out our recent interviews with:
-- CEO Matt Williams
-- Thumbtack CEO Marco Zappacosta
-- Serviz CEO Zorik Gordon

The Commerce Graph

The “Commerce Graph” is a new framework we have developed to think about the future of physical exchange. The model offers an alternative to the dominant narrative about the commerce landscape that frames digital networks as an adversary of physical exchange.


More people say Street Fight Daily is their only must-read newsletter. Subscribe now!

* indicates required
Email Format

© 2015 Street Fight.

Powered by WordPress. Hosting by