What is driving the trend of daily deal sites and mobile discounts? Trendwatching.com set out to answer this question.
They found that today's consumer is not only motivated by saving money, but also by "Dealer-Chic" -- through mobile technology and social media, people get instant bragging rights by getting a deal.
"Deal hunting will continue to be an integral part of consumers’ lives, as it's now about more than just saving money: it’s the thrill, the pursuit, the control, and the perceived smartness, and thus a source of status too," writes the Trendwatching team.
Some statistical highlights:
- When asked about eight money saving strategies, buying items on sale (59%) or using coupons (48%) were the top two answers from consumers around the world (Source: Nielsen, October 2011).
- 62% of U.S. consumers rarely pay full price for clothing and 58% of U.K. consumers "don't like paying full price for anything" (Source: Mintel, September 2011).
- 81% of U.S. consumers think it's fun to see how much money they can save by using coupons or their shopper loyalty card (Source: Deloitte 2010 American Pantry Survey, July 2010).
- Over 40% of coupon ‘enthusiasts’ had a household income of over $70,000 (Source: Nielsen, April 2010).
- In September 2011, the top 10 grossing ‘daily deal’ offers in the US included a $399 seven-night resort stay, a $6 burger meal, a $5 movie ticket and soda deal, and a $70 Cirque de Soleil theater ticket (Source: Yipit, September 2011).
Some deal-making examples from around the world:
- Giving a coupon on-location (in store), emphasizing customer loyalty:
- "Brouha is a mobile messaging platform that allows customers to receive offers and information when in-store, without having to reveal personal data." A customer comes into the store with special RFID card. This card tracks the visits and can give user deals without requiring the user's personal information. The receiving method can be the store's company app, a text message and/or the Brouha app.
- "In May 2011, French supermarket group Carrefour organized the 'Hora Mágica' (Magic Hour) for 200 families in Brazil. For one hour the selected customers (all holders of the retailer's loyalty card) had exclusive access to the store in Osasco, up to a 50% discount on non-food products, and a welcome breakfast."
- "To promote the launch of their Regent Street, London store, Japanese fashion retailer Uniqlo installed the Uniqlo Happy Machine. At various times, the machine would release certain items at heavily discounted prices."
- "In China, during July 2011, South Korean mobile communications firm SK Telecom tested a service synchronizing tablet-equipped shopping carts with consumers’ smartphones to deliver real-time, in-store information using indoor positioning technology." I like this one because the technology goes hand in hand with your mobile device, and it only work for in-store promotions, which encourages the user to revisit the store.
- Giving a coupon based on daily deals/overstock:
- "ThinkNear automatically generates coupons during businesses' slow trading hours. ThinkNear also monitors the local environment for factors that could cause slow-downs, such as rain and snow. When such periods occur, ThinkNear automatically generates coupons for nearby consumers, either as ads in mobile apps." ThinkNear can generate coupons based on the weather, inventory, and high-traffic periods. This helps to liquidate overstock and pair it with consumer flow better than traditional Groupon-type deals.
- "Users of the Daily Gobble's mobile app can also get deals when eating off-peak at various restaurants in New York. Rather than requiring a coupon, diners upload a photo of their check to receive a PayPal credit."
- Giving a coupon based on revisiting deal sites:
- "Sneakpeeq is an online deal site however no prices are listed. Instead, users have to click on the item to take a 'peeq' and see the price; each 'peeq' causes the item's price to decrease, but only until the site’s limited stock runs out. Shoppers have 15 seconds to click and buy. They can choose to check prices at a later date, although this may mean losing out to another buyer."
- "In March 2011, US retailer Gap launched a one-off deals site, gapmyprice.com, where shoppers could decide how much they wanted to pay for their khakis and make an offer online. The retailer then put forward its price, which consumers could accept or make a further bid until a final price was agreed on."
- A relevant example for wireless retail:
- "AT&T’s ShopAlerts and O2's Priority Moments services can alert the networks' customers to exclusive offers and deals based on their location." O2 has a great video about this.
The take-home message: Dealer-Chic is about maintaing your performance and reaching out to a new audience, engaging with consumers in new and unusual ways. The new ecosystem of offering deals should help consumers do the things they want to do at a lower cost, while also making efforts to incentivize repeat visits and reward customer loyalty.