Deal sites: Offer merchants value added technology

Acquisitions in the deals space are certainly gearing up fast for the remainder of 2012. However, this post is not about deal sites being acquired. Rather it is about Daily Deal companies acquiring technologies that can help Merchants become more effective in their business.

Huh? Why would Deal companies do that? Well, given how competitive it is to reach merchants, given the process it takes to convince merchants to run deal promotions and given the fact that the more successful a merchant is the more money they would be willing to “spend”/”share” with the deal site, then it makes sense that Deal companies would want to do everything possible to improve the operational effectiveness of merchants who can simply not afford to do this themselves and therefore create a closer and more profitable working relationship with the Deal company in question.

Some examples:

Groupon’s latest acquisitions include Canadian scheduling company Opencal, Mertado, Uptake, Hyperpublic, Kima Labs and Adku.

Living Social’s latest acquisition includes Onosys

Bloomspot and others use cardlinking technology to offer it’s merchants a better way of rewarding and retaining customers.

And there are many others using reward systems or merchant CRM solutions that help Merchants track Deal campaigns better.

Building stronger relationships with merchants makes strategic sense. This means helping those merchants get better at targeting, marketing, rewarding and keeping local users. The more a Deal site can do that, the more the merchant will see that deal company as a partner, as a provider of business and revenue potential instead of simply another advertising medium. Offering various technologies or services to merchants is one way Deal companies can build better relationships.

What technologies are being acquired or developed:

  • Reward: More and more deal sites are coming up with reward program that help merchants retain more customers.
  • Scheduling: Groupon bought Opencal, and opened the flood gates of discussion surrounding online scheduling. Recently, Setster launched an online scheduling API for the Daily Deal industry. (see dedicated post on Setster in the next day or two)
  • Voucher management: why should merchant have to deal with 10 different voucher management systems from each deal site they work with. There should be a master one that provides easy management, redemption tools, data  and analysis. Mobmanager was such a tool but they got bought out recently by Constant Contact.
  • Point of Sale solutions
  • Email campaigns: Small Local business do not have the time or the know how to execute effective email marketing campaigns to their audience. Deal sites helping them with this can gain a lot of preferred supplier status points.
  • Data analysis: Enabling merchants to understand their user base better will help them make more effective and profitable marketing decisions. Deal sites are in a unique position to offer Data tools.
  • Niche solutions for specific markets such as the restaurant industry, the travel industry, the local activities merchants and the health & Beauty industry. Merchants in each of these industries have specific requirements.
  • Redemption: Redeeming vouchers is still archaic. The industry in the US is maturing faster than in Canada. Mobile redemption is a start but seamless redemption will only happen when it is linked to consumer payments such as credit cards, debit cards, or some kind of mobile credit/wallet system (Groupon Wallet, Facebook credits, etc). The consumer should not have to physically show a voucher at the local merchant. Right now there is no master card linking technology in Canada.

Please contact us directly for a list of technology companies that satisfy the above and that we recommend and also work with Canadian deal sites.

Although certainly a value add, focusing on building technology partnering relationships with merchants will be a challenge for Deal sites. Those that succeed will gain a significant advantage not only over other Daily Deal competitors but also over traditional marketing vehicles vying for the merchant’s attention and budget. The strategy also launches the Deal company to become more than just a Deals marketing service. Rather, they’ll become a solution provider (marketing, operational and technology) for local businesses…a far more attractive proposition for merchants.