The deals industry just received what is probably the top news over the past year in terms of the technology for this industry.
On Thursday May 2nd, 2013 Group Commerce and Nimble Commerce, both Deal Commerce platforms, decided to merge. Strong news indeed. Surprising? Not really. The merged company, which will be called Nimble Commerce, will now be the industry’s largest deal commerce technology company. Here are some thoughts on the situation.
- Both Nimble commerce and Group commerce have been strong supporter, partners and sponsors of the Canadian Deals Association. They have both wanted to make inroads into Canada and we helped promote their technology as best we can and will continue to. We have been strong supports of both companies, they have top notch people working there and we looking forward to working with the newly merged company.
- In Canada, Group Commerce had Rogers as a client and were working on other potential clients in the country . Nimble has Tuango on their platform, use to have the Dealoftheday from the yellow pages before they were sold, had Restoboom before they were sold to Tuango and Nimble also has Transcontinental’s Mega Catch on their platform. So now, that leaves the newly formed Nimble commerce with Rogers and Tuango as major clients across the country and Transcontinental’s mega catch.
- The merger is a good move for both companies. They were both putting pressures on margins in competing against each other. Now their main competition is Deal Current, although they are a lot smaller service. The merger adds a nice amount of revenue to Nimble, given some of the clients that Group Commerce brings in.
- Based on industry chatter, it seems that the Nimble platform will prevail over the Group Commerce one.
- Both Nimble and Group commerce were going after larger publishers. The problem with that, especially in Canada, is that there aren’t any or many left that want to publish their own deals. Some may wish to enter the aggregation space, but none that I know want anything to do with publishing their own deals, unless the business model works within their operational limitations.
- The Nimble platform can do many things other than simply provide a local deals platform. It is being developed to offer a commerce platform for media companies and online publishers to use to market various offers. Nowadays that means a lot more than local deals. It means coupons, product deal and private sales. Nimble also has a deals network where suppliers of deals can share and market their deals through the network, where other publishers can pick them up. The Deals network is not yet available for Canada simply because there needs to be more publishers on the Nimble commerce platform before that becomes viable.
- A Deals commerce platform, especially for Canada, really needs to provide strong value for the publisher in order for them to decide to use it. Platforms such as these need to adapt and mature with the industry just as the industry has matured. Margins are a lot lower, sales are tough to come by, Merchant management and services are more important than ever. The issue that most publisher have with deal platforms is that they are too expensive. Deal platforms typically charge a % of sales, anywhere from 4-9%. At certain volume, that is just too high a price to justify paying a tech vendor instead of having in house staff to look after development and maintenance of your own platform. There are exceptions and special pricing for high volume publishers, but as mentioned above, not many of those left. Smaller and mid sized publishers have a problem paying that kind of price given the present economics of the industry.
- I am a big proponent of outsourcing technology platforms. But smaller and mid sized deal publishers (what Canada has a lot of) are at a disadvantage. They must pay the high price to work with Nimble commerce or even Deal Current. I have always believed that “deal or offer management” should be a feature of very popular ecommerce platforms such as those provided by Shopify or Big Commerce. Both these companies offer very sophisticated ecommerce features to their clients for a very low monthly price. Neither charge transaction fees at their top monthly fee levels. If either developed features so online stores or publishers could add “deals” to their site, then they would attract thousands of small to mid sized clients. This, unfortunately, is not Nimble commerce’s market.
- Nimble Lite: “Great taste, less filling”. I would suggest that Nimble come out with a LITE version of their platform in order to attract those smaller to mid sized players that want to run deals once and awhile , that want to monetize their audience without developing a full featured deals business. The charge should be monthly and not transaction based (unless low) similar to Big commerce or shopify. This will allow Nimble to attract a lot of clients that would otherwise not become a full Nimble client at the moment. These new publishers would be able to provide deals into the Nimble Network (where Nimble makes a %) and some would mature into larger entities that could graduate to the fuller featured Nimble platform.
Congratulation to Nimble Commerce and Group Commerce on their merger and looking forwarded to working with the new company in expanding their platform throughout Canada.
May 02, 2013 12:00 ET
NimbleCommerce and Group Commerce Merge to Accelerate Expansion of Their Global Offers Network and E-commerce Platform
Combination Creates Largest Offers and Promotions Network With Clients in 14 Countries
SANTA CLARA, CA and NEW YORK, NY–(Marketwired – May 2, 2013) – NimbleCommerce, the largest offers and distribution network, today announced it is merging with Group Commerce, a leading e-commerce company for media and brands. Combining the companies creates the world’s largest e-commerce platform and distribution network, and will operate under the NimbleCommerce brand.
As part of the merger, Group Commerce customers will be able to participate in the NimbleCommerce Offers Network, enabling further distribution and inventory selection opportunities that will drive revenues. The combined entity includes more than 100 marquee publishers and media companies in 14 countries including: Cumulus Media, Digital First Media, The New York Times Company, DailyCandy, Golf Channel, Johnston Press, The Evening Standard, Thrillist, Restaurant.com, and many others.
By combining the two companies’ local marketing expertise, merchandising knowledge and cutting-edge e-commerce technologies, NimbleCommerce will be able to more efficiently drive revenue for media companies, merchants and third party e-commerce offer publishers.
“Combining the two companies creates a stronger and profitable company that processes hundreds of millions of dollars annually,” said Prashant Nedungadi, founder and CEO of NimbleCommerce. “Accordingly, in 2013 we expect to leverage our prowess to further innovate, significantly expand the customer base, and increase revenues by over 75% over 2012.”
“This merger enables us to combine knowledge, resources and a network of high quality clients,” said Jonty Kelt, co-founder and CEO of Group Commerce. “It accelerates our ability to provide media companies and brands with e-commerce monetization opportunities — a strong trend as outlined in our recently commissioned Forrester Research.”
Financial terms of the merger were not disclosed.
NimbleCommerce is the largest enterprise offers and promotions platform that connects media companies to merchants and buyers through the NimbleNetwork — the largest offers network in the world with nearly 100,000 merchants worldwide and over 20 million buyers. The company enables audience owners and large publishers to create new revenue streams through ecommerce, paid offers, free coupons, and other local marketing programs. To learn more, visit http://www.nimblecommerce.com.
About Group Commerce
Group Commerce is a market-leading platform for publishers who want to succeed in e-commerce. The company serves the three groups that make an e-commerce program work: the consumer, the publisher, and the merchant. Founded in 2010, Group Commerce is backed by Spark Capital, Carmel Ventures, Jafco Ventures, Lerer Ventures, and Bob Pittman. Clients include Boston.com, CBS Local, DailyCandy, Entercom, The New York Times Company, Thrillist, and more.