ShareThis

Saturday, January 22, 2011

Why Group Buying Is Leaving Local Businesses Behind

 

Chris Treadaway is founder and CEO of Lasso, the social commerce middleware solution for brands and media companies. He is also the author of the book Facebook Marketing: An Hour a Day. He blogs at treadaway.typepad.com.

There’s no denying the appeal of LivingSocial’s half-off Amazon gift card deal. The deal for $20 in Amazon merchandise for $10 racked up over 1.3 million sales, rivaling Groupon’s recent national coup with their Gap coupon.

First of all, kudos to LivingSocial for taking full advantage of Amazon’s recent $175 million investment in the company. In an odd twist of the value proposition of group deals, it’s LivingSocial that benefits the most in offering the deal, especially as they try to claim market share against the increasingly ubiquitous Groupon.

Yet as these “retail hacking” services have leveraged their impressive investment dollars to emerge as national leaders of the space, it’s the local businesses that the companies originally celebrated and benefited that are left behind. And ironically enough, big brands that ultimately won’t need a group purchasing service to monetize great deals are the present-day beneficiary.


The Local Sell-Out


The appeal and promise of Groupon, LivingSocial and other early entries into the group purchasing game was that small brands, companies and businesses could reach potential new customers, and users received great deals on things that they may not have otherwise tried.

There was a serendipitous magic to the process. Those early deals were extremely high value for consumers, but a value of experience as much as price. The nice restaurant you’ve been wanting to try, the massage you’ve been needing but putting off, the random off-kilter adventure like skydiving — these were the things we as consumers loved to have arrive in our inboxes, and that businesses were excited to prompt.

But let’s be honest: The retail hacking secret is long out of the bag, and as more and more businesses sign up to offer deals (and more companies offer group purchasing), the consumer is the big loser. Why? Competition has made it tougher for the group purchasing providers to attract the top local advertisers in almost every market.  That’s why you’ve probably noticed far more “great deals” from acupuncturists than great restaurants lately. It used to be exciting to get the Deal of the Day e-mail. It isn’t anymore.

Group purchasing has gotten much less effective at the local level, precisely where local businesses and we as local-conscious consumers originally found so much value. The leading platform providers are now seeking top national and international brands to do group purchasing deals (e.g. Gap, Amazon, etc.), while the hyperlocal promise, as delivered by group purchasing, falls by the wayside.


But Is That What Brands Need?


Consider the case of The Gap — the first international brand to experiment in the group purchasing arena. The Gap’s August experiment with Groupon sold 445,000 coupons for $11 million in revenue. The deal was very popular, but some have questioned whether or not it was actually a win for The Gap after fees, lost revenue due to sales to existing customers, and accounting of the deal in financial statements. Consider also that The Gap has almost 1.3 million fans on Facebook and countless people in e-mail lists and its rewards program. If you have those assets at your disposal, do you really need to outsource group purchasing? And do you really want to treat your existing customers the same as you treat new customers? Doubtful.


Lessons Learned


Technorati Tags:
Kudos to Living Social and Amazon for a very well executed campaign.  But I think there are three great lessons from the success story.

1. Great deals from great businesses will always be interesting to consumers whether they come from a top-notch local business or an internationally respected brand;

2. Brands that need a quick shot of cash can capture that demand with a great deal and the right social commerce middleware to support them; and

3. The local business/group purchasing honeymoon may be ending, perhaps in a messy divorce.

Big brands have discovered the opportunity in social commerce and are now looking to capitalize.  As what happened with search advertising and what is happening in social advertising, it’s about to get a lot tougher for the typical local business to compete. Easy money from group purchasing is getting a lot harder to find for many local businesses. It is now the beginning of the second wave of social commerce where a variety of more sophisticated marketing approaches, tools, and tricks will be necessary for savvy local businesses to succeed. When that happens, brands will be sure to follow.

Chris Treadaway

Source

Saturday, January 8, 2011

8 Tech Companies to Watch in 2011

 

 

Grab your popcorn and Twizzlers, because 2011 is already shaping up to be an exciting year to watch startups and giants do battle for market share and big ideas. If you’re not sure which companies to look out for in the coming year, our writers and editors have submitted their expert picks below.

What do you think? Did we miss any promising tech companies (new or established) that you see making a big splash in 2011? We want — nay, demand — your forecasts in the comments below.


1. Minimal, Inc.


This Chicago-based design firm finished off 2010 by completing the most successful funding campaign in Kickstarter history. Its TikTok+LunaTik iPod Nano watch conversion kits raised more than $940,000 from more than 13,500 backers and garnered the kind of attention that should help launch this company to new heights in 2011. The gadget accessories market has a new player.

~ Josh Catone, Features Editor


2. StumbleUpon (StumbleUpon)


OK, so StumbleUpon has been around since 2001, so it’s not new to the scene. But with Digg (Digg)’s fall this year and StumbleUpon’s planned release of premium features and publisher pages early this year, it has the potential to scale and be exposed to more users. And considering it’s a big source of traffic for many news sites, it may start investing its time into figuring out how to leverage the site further and connect with its community on the site.

~ Vadim Lavrusik, Community Manager


3. Amimon, Inc.


This Israeli company has perfected its wireless HDTV system over the past years. Imagine plugging a tiny USB device into a laptop, and then displaying its output in full 1080p HD resolution on a monitor 100 feet away, with no lag. Amimon has already introduced one of its own products, but the big deal is the presence of its superior wireless HD standard (known as WHDI, or Wireless Home Digital Interface) chips built inside numerous other products, such as laptops, projectors, TVs and set-top boxes.

~ Charlie White, Senior Editor


4. Bloom Energy


If there is any company poised to revolutionize the energy market, it’s Bloom Energy. The Bloom Energy Server (a.k.a. the “Bloom Box”) changes inputs like natural gas or oil into clean, reusable energy. It’s actually a dynamic fuel cell that creates energy through a chemical reaction. The company has raised more than $400 million to date and is testing its technology with Google (Google), eBay, Wal-Mart and others.

~ Ben Parr, Co-Editor


5. Skype (Skype)


Its recent outage notwithstanding, Skype has been on an impressive run since its breakup with eBay. Usage is at record levels, and features like group video chat and deep Facebook integration have reminded us that Skype is a top tier consumer and business web company. In 2011, the company is likely to go public, and with it, face a whole new level of scrutiny and expectations. Google will also continue to gun at Skype with enhancements to Google Voice (Google Voice) (free U.S. calling for Gmail users through 2011 is an obvious sign of that), making the company all the more intriguing to watch.

~ Adam Ostrow, Editor-in-Chief


6. Tumblr (Tumblr)


With $30 million in funding in its coffer and increasing content curation (not to mention 14 book deals born from its blogs), Tumblr could be shaping up into a much more organized — and ad-worthy — hub for entertainment. We’re interested to see if the company spends that money wisely — and how.

~ Brenna Ehrlich, News Editor


7. Clicker (Clicker)


The connected device ecosystem is still evolving, in large part because of the battle over control between content publishers, device makers and consumers. Clicker is managing to avoid the battle itself and is instead focusing on making it easy for users to find content, irrespective of what service that content might use. The company recently branched into recommendations and has mobile apps, supports Google TV and the Boxee Box and has a killer web app.

~ Christina Warren, Mobile & Apple Reporter


8. inDinero


<

inDinero is looking to replace much of what accountants do for small businesses, giving them a real-time financial overview of their company in the process. It changes how you track cash flows and expenses. It’s funded by Y Combinator and star angel investors and led by savvy entrepreneur Jessica Mah, who graduated from college when she was 19.

~ Ben Parr, Co-Editor

 

 

Source

Thursday, January 6, 2011

Things Babies Born in 2011 Will Never Know

 

 

Huffington Post recently put up a story called You're Out: 20 Things That Became Obsolete This Decade. It's a great retrospective on the technology leaps we've made since the new century began, and it got me thinking about the difference today's technology will make in the lives of tomorrow's kids.

More from MoneyTalksNews.com:
The 10 Commandments of Wealth
How I Crushed the Stock Pros Last Year
10 Tips For the Sleep-Deprived

I've used some of their ideas and added some of my own to make the list below: Do you think kids born in 2011 will recognize any of the following?

Video tape: Starting this year, the news stories we produce here at Money Talks have all been shot, edited, and distributed to TV stations without ever being on any kind of tape. Not only that, the tape-less broadcast camera we use today offers much higher quality than anything that could have been imagined 10 years ago -- and cost less than the lens on the camera we were using previously.

Travel agents: While not dead today, this profession is one of many that's been decimated by the Internet. When it's time for their honeymoon, will those born in 2011 be able to find one?

The separation of work and home: When you're carrying an email-equipped computer in your pocket, it's not just your friends who can find you -- so can your boss. For kids born this year, the wall between office and home will be blurry indeed.

Books, magazines, and newspapers: Like video tape, words written on dead trees are on their way out. Sure, there may be books -- but for those born today, stores that exist solely to sell them will be as numerous as record stores are now.

Movie rental stores: You actually got in your car and drove someplace just to rent a movie?

Watches: Maybe as quaint jewelry, but the correct time is on your smartphone, which is pretty much always in your hand.

mtn.phone.jpg
©Will D/flickr

Paper maps: At one time these were available free at every gas station. They're practically obsolete today, and the next generation will probably have to visit a museum to find one.

Wired phones: Why would you pay $35 every month to have a phone that plugs into a wall? For those born today, this will be a silly concept.

Long distance: Thanks to the Internet, the days of paying more to talk to somebody in the next city, state, or even country are limited.

Newspaper classifieds: The days are gone when you have to buy a bunch of newsprint just to see what's for sale.

Dial-up Internet: While not everyone is on broadband, it won't be long before dial-up Internet goes the way of the plug-in phone.

Encyclopedias: Imagine a time when you had to buy expensive books that were outdated before the ink was dry. This will be a nonsense term for babies born today.

Forgotten friends: Remember when an old friend would bring up someone you went to high school with, and you'd say, "Oh yeah, I forgot about them!" The next generation will automatically be in touch with everyone they've ever known even slightly via Facebook.

Forgotten anything else: Kids born this year will never know what it was like to stand in a bar and incessantly argue the unknowable. Today the world's collective knowledge is on the computer in your pocket or purse. And since you have it with you at all times, why bother remembering anything?

The evening news: The news is on 24/7. And if you're not home to watch it, that's OK -- it's on the smartphone in your pocket.

CDs: First records, then 8-track, then cassette, then CDs -- replacing your music collection used to be an expensive pastime. Now it's cheap(er) and as close as the nearest Internet connection.

Film cameras: For the purist, perhaps, but for kids born today, the word "film" will mean nothing. In fact, even digital cameras -- both video and still -- are in danger of extinction as our pocket computers take over that function too.

[Minivans Making a Comeback]

Yellow and White Pages: Why in the world would you need a 10-pound book just to find someone?

Catalogs: There's no need to send me a book in the mail when I can see everything you have for sale anywhere, anytime. If you want to remind me to look at it, send me an email.

Fax machines: Can you say "scan," ".pdf" and "email?"

One picture to a frame: Such a waste of wall/counter/desk space to have a separate frame around each picture. Eight gigabytes of pictures and/or video in a digital frame encompassing every person you've ever met and everything you've ever done -- now, that's efficient. Especially compared to what we used to do: put our friends and relatives together in a room and force them to watch what we called a "slide show" or "home movies."

Wires: Wires connecting phones to walls? Wires connecting computers, TVs, stereos, and other electronics to each other? Wires connecting computers to the Internet? To kids born in 2011, that will make as much sense as an electric car trailing an extension cord.

Hand-written letters: For that matter, hand-written anything. When was the last time you wrote cursive? In fact, do you even know what the word "cursive" means? Kids born in 2011 won't -- but they'll put you to shame on a tiny keyboard.

Talking to one person at a time: Remember when it was rude to be with one person while talking to another on the phone? Kids born today will just assume that you're supposed to use texting to maintain contact with five or six other people while pretending to pay attention to the person you happen to be physically next to.

Retirement plans: Yes, Johnny, there was a time when all you had to do was work at the same place for 20 years and they'd send you a check every month for as long as you lived. In fact, some companies would even pay your medical bills, too!

[Watch: Toddler Can Name U.S. Presidents]

Mail: What's left when you take the mail you receive today, then subtract the bills you could be paying online, the checks you could be having direct-deposited, and the junk mail you could be receiving as junk email? Answer: A bloated bureaucracy that loses billions of taxpayer dollars annually.

Commercials on TV: They're terrifically expensive, easily avoided with DVRs, and inefficiently target mass audiences. Unless somebody comes up with a way to force you to watch them -- as with video on the Internet -- who's going to pay for them?

Commercial music radio: Smartphones with music-streaming programs like Pandora are a better solution that doesn't include ads screaming between every song.

Hiding: Not long ago, if you didn't answer your home phone, that was that -- nobody knew if you were alive or dead, much less where you might be. Now your phone is not only in your pocket, it can potentially tell everyone -- including advertisers -- exactly where you are.

 

 

Source

Flickr Tags: ,,,

Related Post

Blog Widget by LinkWithin