As we consider the future of daily deals and group buying, one theme that keeps coming up is the idea that increasingly sophisticated targeting (and thus relevance) will, over time, make the deals proposition better for both merchants and consumers. As with traditional advertising, the better targeted a deal is for a consumer’s preferences and geo-location, the better value the promotion is for the merchant who runs it. Getting the right audience to sign up for a specific deal is the key to achieving the repeat business and customer loyalty that make such deep one-time discounts worthwhile. Meanwhile, consumers receive deals and other promotions there is a good chance that they actually want.
“Further focus on relevance is the heart of the success of this business,” Group Commerce CEO Jonty Kelt said last week in a panel at the Digiday:Local conference in New York. “Whether it is very careful geographic targeting through 40 local sales people or the knowledge of what guys want (in Thrillist’s example), harnessing that asset and assuring you’re giving the right thing to the right people – that’s something there is going to be a lot of innovation around and lot of focus on.”
Demonstrating a quality audience to merchants is going to be key to getting them to run a deal in the future. In an article published earlier this week on Street Fight, Tippr COO Samy Aboel-Nil said: “Most business owners would much rather sell a smaller number of vouchers to a much higher quality of audience, than the reverse. Selling 200,000 vouchers to deal seekers is not nearly as valuable as selling 500 [vouchers] to people that are right up your alley and not making a decision because of price.”
And so it’s possible that the many local publishers making forays into the deals space may have a leg up on their pure play competitors, as their print and online products already have established demographics to target. Mike Wallace, the executive director of digital advertising at Boston.com, says it’s actually an advantage that more than “50% of [boston.com’s] audience did not know anything about social commerce or group buying platforms.” Rather than pitching to an audience that is by definition seeking a deal, local content providers attract a set of consumers with a particular profile in a specific location. As a result, discounts are a tool for bringing the right people into a location, rather than a destination for random deal-seekers. Given more specific audience profile information, as well, merchants can also better calibrate their offers to the presumed preferences of their audience.
“It’s about creating unique offers and experiences which are tailored to the local partners we’re working with,” Gilt City‘s lead curator Sarah Sheehan said at the conference. “So that in the end, the customer walking through the door is of the caliber to come back and spend full price.”