The daily deal industry is consolidating and both consumers and merchants will benefit.
If you go back earlier this year, there were probably nearly 1,000 daily deal sites that had popped up around the country. Each of them offered discounts on dining, detailing, manicures, you name it. But many of those upstarts have since merged out of existence or just outright failed.
Groupon is no longer the king of the hill. The rule of threes dictates that capitalism functions best when there are three robust players in a field. So I’m expecting the same thing to happen here. You’ll see Groupon and a couple of competitors defining the market space more and more.
The nation’s two largest radio groups want to be one of survivors and think they have a worthy competitor to Groupon. They’re putting their money on SweetJack.com.
With the SweetJack business model, Clear Channel and Cumulus use FM morning DJs to pump the deals to listeners and then back-sell them later. The back-sell from the radio personality will go something like this: “Hey, did you get that sweet deal on so and so? I got mine and blah, blah, blah…”
What it means for merchants and consumers
SweetJack is expected to roll out to 10 dozen markets in the near future. The beefing up of this competitor means that merchants who are approached by daily deal sites salespeople won’t have lousy terms dictated to them anymore. Merchants should be able to negotiate better terms by playing one daily deal site against another.
The consolidation in the industry and the fight to survive also means daily deal sites will essentially buy the business of consumers going forward for the next few months.
The deals in the e-mails you get each morning will get better as the industry consolidates. But once the fight for market share is over, those deals will go back to being more ordinary.
So this is great time if you like buying daily deals. As for me, I’ve tuned them out and really need to unsubscribe because I never open those emails anymore. I guess I have “deal a day fatigue.”
But if you’re game, there’s a six to eight month window of deals coming that will be better than they’ve ever been.