5 Reasons Daily Deals Are Tanking–and 3 Reasons They’re Not Dead Yet

Image by Getty Images via @daylife

Just in time for Groupon’s initial public offering of stock, it looks like the daily-deals business is already on the decline. Last Friday, Experian Hitwise reported that Web-based traffic to “daily deal and aggregator sites” is down 25% this summer.  Groupon’s traffic plunged 50%. Daily-deal tracker Yipit also reported that deals revenues overall were down 7% in July from June.

Now big-name companies are actually dropping their daily deals. Last week, Facebook said it’s ending its deals service. (They’re still showing up in my inbox even as recently as this morning, however.) And today, Yelp scaled back its deals.

What’s going on? Mainly a serious case of bubble thinking, as entrepreneurs and venture capitalists pile onto the latest hot trend and then discover the market isn’t as boundless as they hoped. But more specifically, the deals business is suffering from a number of challenges:

* Inbox overload. Some 52% of people in a June survey by Experian’s PriceGrabber said they’re overwhelmed by the sheer volume of deal offers. I get deal offers from seven or eight services, even from a couple that I swear I didn’t sign up for.

* Lame, repetitive offers. Seriously, I’m never going to a spa, no matter how many or how big the discounts.

* Merchants can’t take anymore. Lots of them have been complaining that whenever they offer a deal, other services come out of the woodwork and pitch them incessantly. Others think they’re no good for their businesses in the first place, since they condition customers to expect profit-killing discounts. Most of the deals I’ve taken are for businesses I already frequent and probably still would, deal or no deal.

* They’re not as easy to do as they look. Facebook’s deals, which were mostly focused in San Francisco and only occasionally in Silicon Valley where I live (and where Facebook is headquartered), were largely useless to me. And how many people, really, are going to do things like flying lessons? Maybe if the flying-lesson company gets a few takers, it’s worthwhile for them, but for the vast majority of people, offers like this are the worst thing in their email box besides spam.

* Too many of the companies doing them have no particular expertise or the brand breadth to offer them credibly. Really, why would I expect Facebook to offer daily deals? It’s a social network, not an e-commerce site. And daily deals aren’t nearly as social as Groupon’s name implies.

Still, daily deals aren’t dead yet. Here’s why:

* They’re deals! People will always love deals. And despite complaints of too many cold calls from deal services, clearly a lot of merchants like them.

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British Airways launches Facebook app

British Airways is inviting users of the carrier to contribute to an online collection of itineraries through their new ‘Perfect Days’ Facebook app.

Consumers can pick a city the airline flies to and create an itinerary for a 24 hour stay there. Integration with Google Maps allows users to mark each café, museum or bar on a map; other Facebook users can therefore see the precise route and click on each attraction to read information about it.

Users may Like, Share or Comment on city guides posted by others and read tips and insider knowledge from the airline’s well-travelled staff and cabin crew. On the page for Berlin, Leon B from Sales suggests: “Instead of tourist bus tours, Berlin’s regular 100 bus covers many sights for a fraction of the cost.”

 

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The most ‘Liked’ itineraries appear as favourites on the main page of the app.

Richard Bowden, the company’s Digital Marketing Innovation Manager, said: “Perfect Days allows travellers to find new experiences and be inspired by others who are passionate about a destination and want to share their insider knowledge and travel tips.

“We look forward to receiving their feedback from this first version of the new app.”

Digital agency Being created the app for British Airways and commented: “With the Facebook platform the trick is to tap in to existing user behaviour. The Perfect Day app enables British Airways to add value and facilitate conversations that are happening between travellers.”

At the moment only a selection of the world’s major cities are featured on the app, but this number is likely to increase if the app is successful.

The airline has previously used Facebook as part of brand engagement strategies: in 2010 commuters were rewarded if they ‘checked-in’ to a British Airways promotion at Grand Central Terminal in New York City.

Another carrier with a history of a particularly interesting social media presence is KLM, whose ‘Tile and Inspire’ campaign allowed Facebook fans to place their faces on a digital representation of what would be manufactured as a real aircraft,

Earlier this week British Airways was recognised as one of the ten safest airlines in the world by the Air Transport Rating Agency (ATRA).

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