I have been traveling a fair amount lately. And although our posts have been slim over the past little while, our activities sure have not. In traveling to various cities, one specific aspect of the Daily Deals industry grabs my attention. The feature of “Instant Deals”.
The concept is as follows for those not familiar:
Instant Deals are local deals that are available for redemption right now. They are distributed through a mobile phone, are typically location based and are redeemed on the phone (no printing). So, if you are in the mood for lunch and do not know where to go, open your Instant Deals tab and search for deals available within walking distance that are immediately available. These deals can be 20% off, 40%, 50% or any other variation. Show up at the merchant location and instantly redeem your offer.
Groupon has Groupon Now in Canada. Available in Vancouver and Toronto only.
Wagjag launched Wagjag Express in 2011, but now seems to also be offline.
Dealfind has “EveryDay Deals”.
So, in Canada, the only Instant deals available are from Groupon and Dealfind, however Living Social still runs instant deals, but will probably go offline eventually given their recent announcement.
I have used Instant Deals from Groupon, Living Social or Wagjag on 100% of my travels. As a consumer, I found the ability to find a restaurant with a great offer around the corner from me to be, well, fantastic. What consumer would not want this?
As for merchants; the restaurants I went to would have NEVER had me as a client if I did not find them through the Instant Deal feature. As I mentioned in a previous post, At no other point in retail history has there been an option for local merchants/retailers to promote themselves directly to consumers for a “deal” that is available right now, today only. Sure, there are apps, yellow pages, Shopcatch from Torstar, Shopwise from Yellow Pages, Redflagdeals mobile app. But when has a restaurant ever been able to communicate with consumers almost instantly stating that they have extra tables open for lunch or dinner and those that come in right now, within the next 1-2 hours, will get a special deal (say 35-50% off)? The answer is never, but now, both technology and distribution is available in order to fill dead inventory (hotel rooms, restaurant tables, car rentals, seats on a plane, spa services, personal services, sporting events, entertainment events, etc). And that is very exciting to both merchants and consumers.
So why the hell are Instant Deals going away?
Living Social will be ending this feature, Wagjag seems to have pulled away, and other top sites I have spoken to in Canada are not keen on investing, launching, filling and distributing that feature just yet. What is going on if this is so good for consumers and merchants.
1. Consumers love this, but consumers don’t even know they exist.
2. Merchants, especially restaurants, can appreciate this and see this as a marketing vehicle, but most merchant have no idea it even exists or how best to use it or even have the time to manage it.
3. That leaves us with Deal sites. For them, not enough consumers buy the deals and not enough merchants use it. Thus making it an expensive functionality to develop, maintain and manage. If they do not make money, then this feature will not survive.
I believe that such a feature that is so advantageous to consumers and to certain category of merchants (restaurants) should thrive and should be promoted.
The issue is one of distribution. Deal sites are trying to get consumers and merchants to know about this functionality through their own databases or websites. That is a very limiting strategy at distribution. If you only promote instant deals to your own audience, then it will take a while for that audience to get in the habit of using that service. Heck, it takes consumers a while to buy regular daily deals.
* Instant Deals needs to be seen more as a platform than a feature. This can be a powerful mode of local marketing and consumption. I would use the platform to distribute and promote Instant Deals to consumers through strategic Partnerships with large consumer shopping apps and portals. Meaning I would contact the likes of Shopcatch, Shopwise, Poynt, UrbanSpoon even foursquare, etc and negotiate a relationship where instant deals are distributed through their portal. Consumers are already going to shopcatch for instance to find coupon deals to big retailers, why not for local stores. Poynt focuses on hyper local, why not have Instant Deals offered through it. Mobile location based shopping services will continue to thrive, Instant Deals need to be part of the feature set. Yes, easier said than done. Yes, there are costs to obtaining that local inventory. Regardless, this needs to be offered to consumers.
*Attention Shopcatch, Shopwise, Yellowpages, Poynt, Foursquare, etc.. since your platforms are about local savings, then incorporating instant deals is nothing you are not already doing with basic coupons. The difference is that there are revenues to be shared with Instant deals. I can make a viable business case for owning an instant deals platform if I were one of these large local apps. Then get the daily deal companies to feed your platform with instant deals.
* Deal Aggregators: At the moment, no one aggregates Instant Deals on an app. And yes, this should be done. Are Canadian Daily Deal aggregators large enough to even bother with this. Only 2-3 of them. Instead, large media company consumers apps as described above should aggregate Instant Deals from all Deal sites. There is no reason why Redflagdeals app, Shopwise app, Shopcatch app, Poynt app, Urban Spoon or others should not aggregate these types of deals for their audience and share in the revenue.
* Restaurant Industry: If I were a deals site with an instant Deal app, I would contact every single Restaurant Portal in the country and partner with them to distribute instant Restaurant deals to their audience. A healthy revenue share would be negotiated and everyone is happy. If there is one category that is made for these types of deals it is the Restaurant industry. Restaurant portals in the country will not bother building this technology or sales infrastructure themselves but do indeed have the type of audience and the quantity of consumers that Deal sites require to make Instant Deals more effective. Please reach out to me for a list of quality Restaurant portals in the country that may be interested in talking.
* Tourists and business travelers: Instant deals, especially for restaurants, or things to see and do in a city are perfect for tourists and business travelers. The questions of “Where do you want to eat, drink?” or “What do you want to do today or now?” come up often for these types of consumers. Partner with associated industry portals or apps or media companies and establish yet another distribution channel for instant deals.
We have been building strategic partnership for the past 15 years or so for technology and media companies and the reasons for why these types of distribution partnerships are not happening is obvious. 1) No one thought about it, 2) Ego, no one wants to count on another entity, 3) The industry is too new and these conversations have not occurred yet or 4) Money and revenue sharing has not been figured out.
I urge the industry to figure it out. Consumers deserve to receive these great offers. If consumers can get their hands on coupons to local stores, then they should be able to get Instant Daily Deals to local stores as well. So for those Daily Deal companies and media companies in Canada reading this, invest in this concept but look at it as a platform and distribution strategy instead of trying to just getting your own audience on board.
As for me? I am off to New York and have my Instant Deals app already loaded on my phone waiting to be used during my visit.