Marketing to Women: Merry Mobile Christmas!

Deck the halls with boughs of deals as the shoppers start out on their annual shopping sprees.  Some 54% of mobile shoppers who have used a coupon on their device look to retailer websites for mobile coupons.  According to Nielsen’s recent survey, retailer websites are followed by deal-of-the-day websites (such as Groupon and LivingSocial), retailer apps and third party websites.The smartphones are leading the way in shopping navigation. According to Nielson, smartphone owners are dominating daily deal app usage, exceeding tablet users across all daily deal apps used. Groupon is the most widely used daily deal app among users of the apps, with 91 percent indicating that they have used the app on their smartphone and 60 percent stating they’ve used it on their tablet.  Ranking second in daily deal app usage is Living Social (48% smartphone/29% tablet), followed by Google Offers (18% smartphone/9% tablet).

According to Nielsen, 63% of the smartphone users are using their phones to check prices, compared to 56% of tablet owners.  A little more detail about the habits of smartphone mobile shoppers:   looking up a store, used by 78% in this group, using them for shopping lists (40%), pre-purchase research (63%) and using a mobile coupon (39%).

Santa’s definitely mobile this year.

Read more: http://www.mediapost.com/publications/article/188640/mobile-shopping-beyond-the-showroom-effect.html?edition=54212#ixzz2EKbJSunl

Marketing to Women: Daily Deals Losing Their Allure

It looks like daily deals are being dealt a double blow – their business model is flawed and consumers are losing interest at the same time.  The average revenue per customer at Groupon  fell to $63.96 in the 12 months ending September 30 from $76.49 a year earlier. Merchants are finding out that their effectiveness is waning. A  recent Raymond James survey of some 115 merchants that used daily deals services during this found that 39 percent of merchants said they were not likely to run another Groupon promotion over the next couple of years.

Reasons cited by businesses not choosing to run deals again were:

1.  high commission rate

2.  low rate of repeat customers gained through offering a promotion

3.  losing money on the promotion

4.  daily deals seen as less effective than other forms of advertising

As retailers cool on daily deals and are turning to other methods of marketing to women, companies like Groupon and Living Social are trying to reinvent themselves  through ventures such as Groupon Goods and LivingSocial’s Shop that offer more traditional offers.  Currently Groupon holds about 50% of the daily deals market.

Marketing to Women: How to Avoid Daily Deal Disaster

Restaurant Hospitality provided a great checklist to use when running a daily deal (Groupon, Living Social, and the 100 others available in your community).  There have been some businesses overwhelmed with daily deals gone bad.  The two categories that seem to benefit the most from daily deals are restaurants and beauty treatments/products.

Best Advice:  Set an objective for what you want the daily deal to accomplish.  Do you want incremental business during a down time?  Do you want to encourage trial of a new product or a larger purchase?  Do you want to encourage frequency? Do you want to appeal to a new target audience. Match your offer to your objective. 

Some tips for Daily Deal marketing -

1.  Payment.  Find out from the daily deal provider when you will receive payment.  The big players usually take at least 20 days to deliver the first payment.  Smaller providers might provide better terms.

2.  Targeting.  Who or what are you targeting?  Dayparts such as lunch business or dinner business?  Locals versus tourists?  New products or core inventory?  Most daily deals should be to enhance your business and encourage additional sales.  Do you have a plan in place to convert users into an additional visit or purchase?

3.  Promotion.  Daily deal providers can do additional promotion for their offers like television and print advertising. See if your provider will provide extra promotion.   And you might want to make sure you broadcast your offers on social media. Daily deals and social media like each other.  A recent study by Edison and Arbitron found that daily deal users are more likely to use social networks. The study reports the average daily deal user had about 255 friends on Facebook.

4.  Pricing.  I really like the example given for restaurants.  Look at your average check or  transaction. If your objective is to stimulate sales during a down period and the average check is $40, you might run a $15 offer for $30 worth of food and drink.  If you are a provider of beauty products, you might offer a new high margin service/product with a low product cost.

5.  Service.  The last tip is making sure all of your employees are knowledgeable about the offer and provide the customer with personalized service and high quality.  Nothing turns off a customer more than a server or sales associate that is indifferent,  knows nothing about the offer and seems put off by the redemption offer.

6.  Engage New Users.  Make sure you track your new business, making sure you get their emails so you can continue to communicate your offers to them.

Daily deals may be still by growing but it is among the big players.  According to BIA/Kelsey, United States spending on daily deals, instant deals, and flash sales is expected to hit $2 billion in 2012 and continue to grow to more than $4.2 billion in 2015.  However, one-third of all daily deal sites have disappeared.  Research by Foresee, conducted in November and December 2011, shows that 60% of visitors of the top 40 websites were enrolled in at least one daily deal site. That’s a decrease from the previous spring, when the figure was 65%. And the percentage of subscribers who had purchased a daily deal over the last 90 days was shrinking, from 67% in the spring of 2011, to 63% in the early winter of 2011.

Read more: http://business.time.com/2012/03/07/are-daily-deals-dying-or-as-hot-as-ever/#ixzz2AvmNgRll

http://www.marketingprofs.com/articles/2012/7981/lets-make-a-deal-on-daily-deals#ixzz2Avjbt0kV

• Marketing to Women: Are Daily Deals Still Hot? (jamiedunham.wordpress.com)

 

Marketing to Women: Are Daily Deals Still Hot?

Is your email box cluttered with Groupon, Living Social, Daily Candy Deals, One Kings Lane, Fab and more?  Can all of these daily deals still be working?  Are people still using them?  According to a new study from Chadwick Martin Bailey and Constant Contact, four out of five Daily Deal subscribers have purchased at least one deal in the last six months.  In fact, 27% have purchased five or more, 21% have bought 3-4 deals and 31% 1-2 deals.  Just 21% never pulled their credit card out of their wallet.

Here are the top five types of Daily Deals:

• Restaurants   65%
• Entertainment   48%
• Food & Grocery   36%
• Travel   25%
• Spa & Beauty   23%

While 60% of daily deal subscribers strongly agree they will buy a deal because it is something they already like to do, roughly 2 in 5 will do so because it comes from a local business with which they are familiar (43%), or is close to where they work or live (39%).

Just like all other marketing methods, marketers to women need to know their target audience, understand what type of offer will draw new business and not cannibalize existing loyal users.  The following info might be helpful.

Daily Deal Demographics

Edison Research 2012 Daily Deal study says that one in six persons or 15% of Americans 12+ are registered users of at least one daily deal site.  Of course, 66% of all deal users are women.  Some 60% are aged 25-54.  One-third have incomes above $75,000.  And we sharp-shopping Southerners love a good deal – 45% of users live in the South.

I also find it interesting that more than half of all users joined in the past year, and more than 60% use the daily deals at least as much or more than when they first joined.

Daily Deal users are mobile with many more devices that the public at large. According to Nielsen, Daily deal sites saw more than 10 million Americans using their apps just during June 2012.  Groupon is the third most popular mobile app (11,942,000 users) among the 45 million smartphone users, only outpaced by eBay and Amazon.  LivingSocial is number five.

Daily deal users spend more time online – 66% feel the internet is the most essential media in their life and are heavy social network users.

Groupon is still the Gorilla of Deals with 83% of the users, and Living Social with only 44%.  Two-thirds of Living Social users are also registered with Groupon.

But here’s some good news about the effectiveness of  Daily Deals:  Some 23% tried new businesses for the first time because of the deal and continued to visit that business without a deal.  Another 30% tried something new but never returned.  And 28% were already customers of a business and used a deal.  Both Groupon and Living Social seem to produce the same percentage of return business.

Sharing Deals with Friends and Family

One more fact that might be important to those of us who market to women:  54% of consumers who subscribe to a daily deal program will share a deal because it’s great, regardless of whether or not they are current customers of a business. 45% strongly agree that they would share a deal because they know their friends will like it, and 34% are more likely to share the deals from businesses of which they are already customers.

Recommendations from our friends and family are important.  These recommendations make consumers more likely to purchase a deal from an unfamiliar small business. What makes us more likely?

• Deal is recommended by friends or family   50%
• The deal comes from a national deal service (e.g. Groupon or LivingSocial)   32%
• Deal is recommended by a social media site   6%

Women are the most likely to share a deal.  More than twice as many consumers share deals via email than on social networks. Most common methods for sharing daily deals with friends and family:

• Email   55%
• Facebook   27%
• Twitter   6%

Marketing to Smartphone Women: M is for Mobile Coupons!

The old saw “Shop ’til you drop” may have to be modified to “Shop ’til you drop your phone”.  According to a Harris Interactive survey done for CouponCabin of over 3300 U.S. adults, 40% of smartphone owners have redeemed a coupon on their mobile device.

What are those coupons they are redeeming? Harris learned that 39% of redemptions from smartphones involved grocery store coupons and 34% involved online coupon codes. Less than a third of redemptions (29%) were printable coupons and less than a quarter (24%) were free samples or trials.

I think the actual bar code coupons on your phone are going to gain traction in the future for in-store shopping.  Walgreen’s was one of the first to provide mobile coupons on their app.  Every week a series of coupons are provided in the app for your convenience.  I look at the coupons provided every time I walk into the store.

The study says that 29% of smartphone owners search for mobile coupons at least once a month, and 72% of advanced phone owners say they would be at least somewhat likely to use a mobile app that offered different kinds of coupons.

So I assumed that CouponCabin has an app that delivers coupons.  I decided to give it a try.  The grocery coupons seemed good but I had to email them to myself.  There were options for some of the deals that were scannable from my phone.   I already have Coupon Sherpa and honestly I tend to forget that I have it since only a few of the stores are near me but their coupons have barcodes that can be scanned directly from the phone.

Currently 50% of all mobiles are smartphones and the number of smartphones will only continue to increase.  Some 59% of smartphone owners think it is important to be able to make purchases from their smartphones.  One out of four smartphone users are like me – they have searched for a coupon to use in a retail store – or scanned a barcode for comparison shopping.

Marketers should be ready for the coming onslaught of mobile coupons and comparison shopping.  Customer service, ease of check-out and speed of acceptance will be defining moments for the retailers that use mobile coupons.

Daily Deal Marketing: The Rise and Fall of Groupon?

There is some talk about Groupon fatigue so I thought this new survey among new media professionals about daily deal usage was particularly interesting.

While more than 90% of new media professionals subscribe to a daily deal or coupon service, only 22.4% think the daily deals will be important to the future success of their business, or their clients’ business.

The survey, fielded by Digicareers, was conducted among 450 new media professionals this summer and shows that new media professionals are more likely to subscribe to Groupon (87.3%) and Living Social (71.4%).  However,  the respondents felt that only 15% of the offers they received were of interest or relevant to them.  They reported participating in an average of 7.6 deals, or one every two months.

Eighty-six percent  do not use the deal sites for their own or client marketing.  Reasons for not using the deal sites for marketing included  the deal format not applicable to their business, deals do not reach their target audience, the benefit to their business is in question and the deals might tarnish their brand.

However, daily deals are viewed as complementary to other marketing activities such as online marketing, emails, print  and search engine marketing.

Why all this negativity?  I think it reflects the over saturation in the category, the importance of matching the deal to the business and customer, unattractive revenue sharing agreements and the varied results to retailers.  I think there are some niche daily deals that provide greater relevance and value to consumers.

We are seeing the daily deal gold rush coming to an end.  Groupon has seen traffic tumble some 50% this summer, Facebook left the deal business and Yelp is slowing getting out of the daily deal business.

 

Related articles

• Are We Approaching the End of the Daily Deals Era? (mashable.com)

Marketing to Women: Confessions of a Twenty-Something Couponer

Katie Dunham, New Coupon Queen

Enjoy this post from Katie Dunham, newly christened twenty-something coupon queen.

Like every other American woman in our recession-laden times, I need (and like) to save money.  And like every other person with basic cable, I’m fascinated by the TLC program “Extreme Couponing.”

For the uninitiated, “Extreme Couponing” is an addictive reality show following people who coupon like it’s a full-time job.  Viewers follow along as these mega-bargain shoppers proceed to save hundreds upon hundreds of dollars at their local grocery stores, often without spending a dime in a single transaction. It’s riveting.

Sure, many of these people could also easily be classified as grocery hoarders, but the initiative they take towards saving money is inspiring and has gotten me thinking recently.  Sure, I don’t need 75 bottles of barbecue sauce or 100 packets of noodles, but if those people can save that much, I can certainly shave down my two-digit weekly  grocery budget, right?  Right.  Not to mention, that according to the NCH Resource Center, consumers saved $2 billion with coupons in the first half of 2011.  If everyone else in America can coupon, so can I.

But as I begin life as a newly christened coupon queen, I’ve had a few things to think about:

1.   Couponing takes time, something which I and my fellow millennials are even more stingy about than money.  Where the extreme couponers often spend upwards of 40 hours a week clipping coupons, cross-referencing grocery store circulars, or scouting multiple supermarkets, I’m lucky if I can spend half an hour on Sunday nights figuring out my shopping for the week, much less searching for a newspaper full of coupons.  (But that’s a conversation for another day.)

2.   Couponing still seems to hold a bit of stigma among my generation. Even among the young professionals, and “creative underclass” here in Los Angeles, who are forever living beyond our means, couponing is something our others and grandmothers do.  No offense.  And often the products featured in coupons aren’t really stuff we would usually buy.   Give me the cereal, hair product, and ice cream coupons; I’ll leave the kiddie snacks, frozen breakfast bowls, and Metamucil for someone else.

3.   Trader Joe’s doesn’t take coupons.  Let’s be honest, that’s a big deal.  Soft cheeses and coconut water can cost twice as much at major retailers.

So, what’s the solution for someone like me?  Loyalty programs and daily deal coupons!  Online discounts are great too.  According to Coupons.com, digital coupons were up 100% from June 2010 to June 2011, while newspaper coupons only grew by 8.4%.  Of the more than $1 billion digital coupon savings reported by Coupons.com, many of those coupons were uploaded to a store loyalty card.

In the latest Online Shopper Intelligence survey, about one-third of online shoppers said they use online coupon sites, with 35 million people visiting coupon sites in April 2010.  More than half of shoppers who used an online coupon code said that if not for the discount, they would not have made the purchase.  Looks like coupons might just drive sales too!

This all rings true in my own coupon quest.  As I’ve made a concerted effort to be a smarter shopper over the past few months, my real go-tos have become CVS and Ulta, for their amazingly user-friendly rewards programs.  For every few transactions at CVS, I’ll get a few dollars back and a bevy of new coupons tailored to my shopping patterns.  And if I plan my toiletry and cosmetic purchases around trips to Ulta, I can make good use of their fantastic coupons ($3.50 off $10; $20% off) and rack up the rewards points.  True confession: Because of my Ulta rewards points, I haven’t paid for perfume in about a year.

And don’t even get me started on daily deal coupons.  I’m sitting on about a dozen right now, and I’m talking about coupons I’ll actually use!  The proliferation of daily deal sites and e-mails seems tailor-made for myself and my friends.  We can now live like we want to but at half the price, frequenting our favorite gourmet burger places, pricey Korean spas, and fancy new yoga studios.

And one last thing, a recent article in the Wall Street Journal reported that retailers are now introducing smaller package sizes, a real help for those of us not shopping for families or large households (or going out instead of cooking every night).

I guess the conclusion to be drawn here is that there’s a coupon out there for everyone.  And, in the midst of the recession, retailers have been creative enough to get us too-cool twenty-somethings to do a little extreme couponing of our own.

Marketing to Women: Groupon Deals Too Good To Be True?

No one knows how often it happens, but merchant fraud is a possibility in group buying daily deals like Groupon and Living Social.  Because most of the leading buying groups pays off the merchants in fairly quick order (Groupon pays in 60 days and Living Social in 15 days), it is possible for a fake or fraudulent merchant to sell a large amount of highly discounted offers, receive their payout and not redeem the sales by closing the business or not responding to calls for reservations or appointments.  It’s a scenario for a grab the money and run incident.

Groupon does hold money in reserve in cause of fraudulent activity, and takes steps to read online reviews and ratings for businesses that advertise with them.

One of the issues, however, with most group deals is that they encourage advertisers to provide uncapped deals and extremely discounted offers.  The standard offer is a 50% off offer, requiring businesses to take a 75% reduction in price.  That can be a hard road for many businesses, fraud or not, because of their inability to honor all of the sales in a timely manner.  A Rice University study in 2010 found that Groupon promotions were unprofitable for 32 percent of the businesses surveyed and over 40 percent of those businesses indicated they would not run a comparable promotion again. That’s the fear for many businesses – an offer might be too successful.  Adding to the fear for businesses is the low return rate of first-time customers.  Only one in five return to the advertised business.

Techcrunch tells a common story of one business:

In January, Salon 505 sold more than 3,000 vouchers through LivingSocial for $99 on January 21, with an alleged value of $550. ($550 for a half day spa treatment in Austin? Whatever.) With typical deal terms, that should be about $165,000 in revenue to the merchant. By February 16, there were reports of trouble redeeming vouchers. In that month, the salon redeemed about 120 vouchers. At that rate, it would take about two years to redeem all of the vouchers that were sold. In June, the 34-year-old business closed.

To be fair, it seems that consumers that have problems with their deals are usually taken care of by the group buying company.  But the business model seems to be questionable as a long-term business-building tool for businesses.

Some of the caveats for merchants have been detailed in Wired and include the following:

1.  In some states, it is illegal to discount alcohol, but Groupon offers don’t exclude it.

2.  In some states, the coupons must have a 5-year expiration, much longer than most group-buying provide.

3.  There are certain areas that require the merchant to refund money to the customer if the purchase is less than the amount of the coupon.

4.  Some states require merchants to hand over money received from expired coupons.

5.  Sales tax may be an issue if businesses are collecting the full amount of sales tax on the total regular price and then discounting the coupon.  If they are not calculating the tax on the original coupon purchase plus any additional amount charged at the time of redemption, they are charging too much sales tax.

There are models out there that do allow merchants to cap their deals, play nicely with the state requirements and try to work with well-known local businesses.  One of my favorites is Daily Deals for Moms, a group dedicated to their community.

Marketers wanting to try a group buying deal should talk with several companies and determine which ones have a base of consumers that fits their target market and ask questions about state regulations that might enter in to their deals.

Related articles

• Groupon Abuse of Consumer Protection Laws Alarming, Says Harvard Business Expert – Brendan Coffey – Loaded – Forbes (blogs.forbes.com)
• Groupon’s Legal Risks And Hidden Gift To Merchants (wired.com)
• Marketing to Women: Only 1 in 5 Groupon Users Return (jamiedunham.wordpress.com)
• Marketing to Women: The Demographics of Groupon and Living Social (jamiedunham.wordpress.com)

Marketing to Women: Only 1 in 5 Groupon Users Return

A new twist on the old 80-20 rule about advertising holds true for Groupon and other daily group deals.   A second study from Rice University on group deals reported in Clickz.com finds only 19.9 percent of deal users are returning for full-price purchases at restaurants, bars, salons, and other retailers.

An earlier study in 2010 found that Groupon promotions were unprofitable for 32 percent of the businesses surveyed and over 40 percent of those businesses indicated they would not run a comparable promotion again.  This new study has caused some critics to wonder if daily deal sites will survive due to the low levels of loyalty exhibited by deal users.

However, daily deals do get the attention of those coveted new users;  some 80% of deal users are new customers, and any coupon program should really only encourage trial.

Here are some other findings from Rice University’s research:

• 35.9 percent of deals users spend more than the voucher value when visiting a merchant.  Marketers need to have a strategy for incremental sales.
• 21.7 percent of them never redeem the vouchers they’ve paid for.  In traditional coupons, some 98% of coupons are never redeemed, although it makes sense that once you have paid for something, you are more likely to redeem it.
• 55.5 percent of businesses reported making money on their promotions, 26.6 percent lost money, and 17.9 percent broke even.  Breaking even is the best that one can expect because of the cost of Groupon deals.  Most marketers can only receive 25% of the face value of the deal.
• 48.1 percent of businesses planned to run another daily deal promotion, 19.8 percent indicated they would not, and 32.1 percent didn’t know for sure.  Making sure you are encouraging trial of a new product or service, or growing business in the slow periods might be a strategy for running a daily deal.

So, what businesses seem to benefit from daily deals?  The study reports that two of the industries on which daily deal sites rely most — restaurants/bars and salons/spas —aren’t finding the greatest success through the promotions. Only 44 percent of the restaurants surveyed earned a profit from the daily deal, and just 36 percent intend to run another such promotion in the future. While 53.7 percent of salons and spas made money on the promotion, less than 42 percent said they intend to run another daily deal.

The word of caution for marketers.  Have a real objective for your daily deal strategy.  Don’t expect to make money, but have a plan for getting first time customers to either purchase incrementally or come back a second time.

I don’t know enough to prognosticate the future of Groupon and Living Social.  Fad or here to stay?   Groupon has certainly invested money in recruiting customers to the point of not making a profit.  And competition is rampant, offering better deals for marketers who shop around for the best audience for their product.

The true legacy of all of these daily deal sites is the continued reliance on coupons and deals driving sales.

Marketing to Women: The Demographics of Groupon and Living Social

Image via CrunchBase

There is an exponential explosion of daily deal sites across the United States.  You don’t have to look very far to see it.  The local publications, moms groups, charity groups, and email groups are all getting into the action, along with regional and national clones.  I get information on a new one every day.   Even with the countless new options, Groupon and Living Social still account for more than 90% of all visits among group buying websites tracked by comScore.

As with any new media, demographics become a major part of the marketing decision when reaching out to deal driven women audiences.  It seems that many of these sites have very different niche audiences.  The demographics of Groupon and Living Social testify to the differences.

The Differences between Groupon and Living Social

 Comscore has compiled some interesting comparisons of the Groupon and Living Social audiences.

Geography:  Groupon is stronger in the Midwest and Pacific regions of the country, while Living Social does better in the East.

Age and Gender:  Groupon does better among younger consumers and women, while Living Social’s users attract more middle-aged users, with an equal split among men and women.

Where They Advertise:  Both companies believe in investing to acquire new customers, but they each use different online media tactics to do so.  Living Social places 73% of their ads in the top five online properties (Google, Facebook, AOL, Microsoft sites, Yahoo) while Groupon does the exact opposite.  Groupon targets smaller sites with only 31% of its ads on the top five.   The cost of acquiring users has been talked about in the media recently because of Groupon’s pending IPO.  These acquisition costs have kept these companies from actually making a profit.

What This Means for Marketers.  Marketers need to ask the right questions when considering a daily deal site.  Is the deal for a national or local market? Does it fit my marketing area? What is your objective in advertising – acquiring new customers, highlighting a new service, or revitalizing your market?  Who are you targeting – younger women or older women?  Is your product an impulse item like restaurants or beauty items which seem to attract more users?  How are you going to convert these new customers when they come in your store?  Are there other services or products that you would like to introduce them to?  Is there a bounceback strategy?

To Infinity and Beyond.  The current use of Groupon for retail products and services is getting ready to move into a new market that has traditionally been served by the big coupon players Valassis Communications and News Corp.’s Smart Source.  This week Groupon announced it is joining two Boston marketing-services and analytics firms to test a grocery coupon with Springfield, Mass.-based Big Y.  Using supermarket loyalty cards, shoppers can get a $39.99 seafood grill pack for $24, with the deal loaded onto their loyalty card and reflected at checkout.  General Mills is going also testing a Groupon deal in select markets, bypassing the retailer to ship directly to consumer.  The wild west of daily deals and its effect on retail just continues to grow in unexpected ways.