As we have previously mentioned, there are 3 major Daily Deal platforms available for Canada. Group Commerce, Deal Current and Nimble Commerce. Each bring a variety of advantages to their clients. This post will focus on Group Commerce mostly because they focus on a set of services that help deal publishers attract more merchant inventory and generally aid in the management of the deals program. Group Commerce is less of a technology company and more of a services company enabling publishers to operate a deals business more effectively.
Let’s start by mentioning that Rogers and it’s deals site rdeals.ca is a Group Commerce client. As far as clients go, that’s a pretty good one. They also have notable clients in the US such as New York Times, Askmen, Spafinder, Parents.com, Thrillist, Daily Candy, Boston Deals and CBS Local offers to name a few. These are strong publishers that have chosen Group Commerce to help drive eCommerce sales.
Group commerce is now serious about making in roads into Canada and helping publishers operate and manage a deals program far more effectively than at the present. They are actively reaching out to Canadian publishers and working closely with them to show them how they can leverage Group Commerce services and technology to run a more profitable deals and ecommerce program. They have asked us to help spread the word. After visiting with them, looking at their technology and their services, we agreed.
We are excited about what Group Commerce offers because they have gone beyond simply offering a technology platform. Deal publishers nowadays need more than a tech platform to succeed in this industry and Group Commerce has made services a key part of what they offer. Not many platform companies can offer this. It is quite expenses to do so yet Group Commerce sees it as a fundamental part of working with and helping clients succeed. They have embedded services that help publishers with sales, marketing and strategy. They include ecommerce strategy, best practices, merchandising strategy, sourcing offers from merchants, customer service, fulfillment, payment processing, merchant payments, marketing and audience development.
If, for example, signing up merchants, offering customer support, managing merchant payments was left up to Group Commerce, that would then leave a lot more time, energy and budget for the Publisher to focus on audience attainment or marketing. The point is, Publishers, especially in Canada, need a lot more than just a technology platform to run on. They need a set of services to help them operate a more successful deals program and that almost always ends up revolving around obtaining merchant inventory and obtaining an audience. Group Commerce knows this and they have invested heavily and strategically to help Canadian publishers with their ecommerce efforts.
Group Commerce CEO, Jonty Kelt, recently wrote an article about the Newspaper industry and how ecommerce is helping revitalize certain aspects of that industry. Here are parts of his article.
“Over the past few years, the pendulum has swung from the newspaper industry writing its own obituary to a new — and what some might say is surprising — trend: bullishness. When analysts recently expressed concerns about the future of his papers, Rupert Murdoch responded by saying: “The answer is one word: digital. News is the most valuable commodity in the world, even if fewer people are buying printed papers on crushed wood.”
This new optimism has emerged alongside some dire trends. The hope that print ad revenue might rebound (or at the very least, plateau) has passed. Print ad revenues are half of what they were in 2006) a reflection of the steep decline in freestanding inserts’ revenue and circulation. So, too, has unceremoniously ended the decade-long battle to see if online advertising can make up the shortfall.
The source of the increasing bullishness is simple: newspapers — as trusted sources of news and recommendations for local audiences — have begun to understand how to leverage their unique position at the nexus of digital content and commerce. Rather than simply relying on revenue from an ad unit to send a consumer to another Web site, newspapers have begun to realize that they themselves possess all the necessary resources to own the entire e-commerce transaction.
By operating full-scale e-commerce programs and developing digital relationships with retailers (who are increasingly looking to go direct-to-consumer), newspapers come one step closer to a digital equivalent to a freestanding insert, driving consumers to purchase a retailer’s product directly on the newspaper’s domain. Here, an old model is made new, with the newspaper digitally serving the classic function of a freestanding insert, but also supporting the click-to-purchase component as well. In short, this isn’t just a patchwork model hoping to compensate for the loss of print revenues — à la online advertising — this is a superior, more profitable model.
Moreover, newspapers are beginning to use e-commerce programs to take a large chunk of the local e-commerce services market, a space rapidly developed by Deal providers. Local merchants, however, have become wary of working with some of these deal providers and are turning to trusted local papers for more scalable, distributive reach and better brand affiliation. In the US, a number of leading newspapers, including The New York Times, The Minneapolis Star-Tribune, and others, are already seeing real returns through this approach. According to Arthur Sulzberger, Jr. in the New York Times Corporation’s latest earnings report the Times have made “significant progress over the past year in growing our new consumer revenue stream. We believe there is more opportunity for further growth in this revenue stream and our subscriber count.” So, it’s not particularly surprising that forward-thinking analysts see real hope for the newsroom.
Adding to the surge of optimism is the fact that the market is growing. Consumers have become more and more comfortable with buying online. Despite its widespread adoption, convenience, and value, e-commerce still represents approximately 5% of all retail commerce, so there’s room for opportunity and growth. Today, that 5% represents a $240 billion market in the U.S. alone. As this e-commerce pie grows, newspapers are uniquely positioned to sustain the future of their businesses with it.
While newspapers will maintain revenue streams from advertising (both online and offline) and paywalls, it’s not enough. These new monetization opportunities in the digital space will provide a critical mechanism to help these papers not only survive, but thrive.
Warren Buffett, having directed Berkshire Hathaway in the purchase of over 66 local and community newspapers over the past few years, sees a huge opportunity in this space, and has challenged the newspaper industry to begin to explore new revenue opportunities, saying: “We want your best thinking as we work out the blend of digital and print that will attract both the audience and the revenue we need.”
That thinking has arrived — and it has come in the form of e-commerce.”
The Deals business is tough. Every advantage a publisher can get should be leveraged.
For Canadian publishers who would like to speak with Group Commerce about how they can help with their Deals program, please contact them directly or get a hold of us and we’ll give you our input and put you in touch with the appropriate people.