Daily Deal or Group Buying promotions, although typically for local retailers or online retailers, can certainly be leveraged by manufacturers. The manufacturer simply needs to create a mechanism for the consumer to redeem the offer once they buy it from the daily deal provider. They can create a simple web page or site for the offer so consumer can redeem and have their product or service redeemed from that web site.
The benefit for the manufacturer is in leveraging the Daily Deal Provider’s consumer database to promote the manufacturer’s offer.
What Manufacturers need to know:
- The objective for the manufacturer is to drive sales and consumer adoption.
- No advertising cost. There is no cost for advertising through Daily deal providers. This can be a significant cost and administrative advantage for the manufacturer.
- The manufacturer needs to either create a website for consumers to redeem their offer or partner with a retailer or a group of retailers in order for consumers to redeem the offer. If the manufacturers circumvents the retailer, they keep more margin. If a retailer is involved in the process then the retailer will obviously share in the daily deal revenue. The average commission that daily deal providers receive is about 45%. However the range is between 25-45%.
- Using a Daily Deal promotion can be an effective scenario for testing a market or testing products for the manufacturer
- Not everyone will redeem their voucher: Whether it is due to laziness or forgetfulness, the fact is that 15% of consumers never redeem their deals voucher.
Coupon promotions are defined to be a special promo, rebate, price or value add offer provided to consumers. The offer can be anything and are typically distributed directly to consumers by the retailer or through a coupon distribution service such as an affiliate network or a coupon portal. Consumer Packaged Goods and Grocery coupons are two popular categories for manufacturers.
Benefits to Manufacturers:
- Provides an incentive for consumers to try and use the product
- Reward loyal brand users
- Encourage repeat purchases
- Use for product trials
- Build retailer relationships
- Gain additional advertising exposure through distribution by coupon portals or social media
Flash sales are a time-limited offer at a high discount, typically offered on products and promoted by an online flash sales retailer. Flash sales have proven to be beneficial for selling off surplus inventory for the manufacturer, the supplier and the retailer. Ultimately the consumer wins out.
Flash sales last anywhere from 1-5 days and may have a limited inventory. Consumers are made aware of these sales by an email alerts and through the Flash sales web site.
What is the difference between Flash sales and Daily deals for a Manufacturer?
With Daily Deals, the manufacturer needs to create a redemption vehicle so consumers can receive their products. Typically this is a simply webpage or websites that is created for the promotion. The manufacturer is then responsible for getting that product to the consumer.
A flash sale for a manufacturer is no different than working with an existing retailer. Flash sale providers are eTailers. Therefore a manufacturer sells their inventory through a flash sales retailer. And the Flash sales site is responsible for getting the inventory to the consumer.