Daily Deals in the Groceries market

As the Daily Deal market matures, so do the categories offered to consumers. Given the shopping patterns of Canadian consumers, and given the fact that deal sites need to entice their database to purchase more often per month, then it makes sense that Deal sites are trying to mature their deals inventory to include items and services that consumer buy more often. Thus increasing revenue opportunities for deals sites.

The top categories offered and purchased on deal sites are:

* Restaurant deals: they’re great, but consumers only go so often per month.

* Spa deals: High perceived value, bring it a lot of revenue but consumers only go to the Spa one and a while

* Travel deals: Very high value, high sales volume but yet again, consumer only use them once and a while

* Product deals: Consumers can buy these deals more often and it is easier for deal sites to promote them

* City Activities: They’re fun, exciting but again consumers only purchase them once and a while


In growing a deals business, and in leveraging a consumer database that has cost tens of thousands, hundreds of thousand in many cases millions of dollars to grow and cultivate, deal sites need to and probably would like to start offering category of deals that consumers can buy more often. Offering product deals was a start, but there are other categories that also make sense to offer.

One such category is something that all Canadians require and use daily. The category is Groceries.

Groceries are Canadian’s #1 consumer expense behind shelter and transportation. The average Canadian household spends over $7000-$10,000 a year on food. Food spending also represents about 10% of a household’s expenditure. Given the size of the market and the need for savings within, it is no wonder that Groceries will be another strong category for “Daily Deal” sites going forward.

Now, the groceries “Deals and Couponing” industry in Canada is nowhere near as vibrant as in the USA. The main couponing sites including websaver.ca, Save.ca, brandsaver.ca, flyerland.ca and other have their share of grocery coupons, but none even come close to the extreme inventory and savings that can be had in the US. As such, the opportunity in driving revenues from offering Grocery Deals is a strong one for Deal sites in
Canada. We expect this category to increase in popularity over the upcoming 18 months as more deal sites form relationships with Grocery distributors and retailers.

At the present, there are are two major sites in Canada that already have a Grocery category. Wagjag has had one since their purchase of deal site Foodscrooge in 2011. It is called Wagjag Grocers and offers a variety of grocery deals. The other major Canadian site is Tuango which just launched a Grocery category last week called Tuango Grocery.

Will major deal sites with significant volume like Wagjag and Tuango alter Grocery spending habits of Canadians? If they do, they can grab significant mindshare not only from consumers but also from large food distributors and retailers across the country. Translation: good for consumers.