CityPockets, a New York-based service that offered a secondary market to resell unused daily deal vouchers, will be shutting down in late June and has announced the launch of a coupon discovery site called Reclipit . The announcement comes as Groupon’s share-price continues to plummet and overall investor confidence in the “daily deals” space remains extremely low.
The decision to shutter CityPockets came in late 2011 as the site’s consumer base stagnated and the company struggled to raise funding. “There are just so many holes and unanswered questions in the daily deals space,” Yeoh told Street Fight in an interview. “We realized that it was going to be hard to raise money on something that could change in a year.”
Yeoh says that the margins on the secondary market were low to begin with, but that the more important issue is that Groupon and LivingSocial still control over 70-80% of the market.
“In the next six months you’re going to see a lot of daily deals sites closing down,” said Yeoh.
“We thought [Groupon and LivingSocial’s] market share would eventually even out, but because the standalone daily deal sites are having trouble surviving and even publishers who are doing well are not investing more, things just stayed the same,” said Yeoh. “So the space is kind of stagnant which, is the heart of the problem.”
With Groupon and LivingSocial’s market share solidified and the local marketing space continuing to segment between merchant-facing tools and a handful of big aggregators, the future for stand-alone deal plays looks increasingly bleak. “They’re going to get squeezed from both ends,” said Yeoh about the stand-alone players, who she believes, are already seeing numbers decline rapidly. “In the next six months you’re going to see a lot of daily deals sites closing down.”
The company’s new venture Reclipit aims to be a sort of Pinterest for coupon clippers, allowing users to post and “reclip” deals posted by established deal bloggers and friends. Users can use a bookmarklet to clip the image and link to deal and repost the metadata to their Reclipit accounts. The company is attempting to position itself as a coupon clearinghouse of sorts, through which, deal curators can browse and syndicate offers.
The shift from local commerce to ecommerce is as much a restart as it is a pivot for the small startup. Reclipit will likely carry over a handful of CityPockets users, but the dynamics of the digital couponing market are substantially different from the brick-and-mortar SMB crowd. Yeoh says that down the road the company plans to build relationships with brands in order to promote exclusive deals to influential curators but it’s unclear why brands with existing reach would want to target users in an environment exclusively based on discounting.
Steven Jacobs is an associate editor at Street Fight.