Why deal websites don’t work for retailers

, posted: 15-Mar-2011 16:01

I'm a big fan of deal-a-day websites.  There are plenty of them around, and they let us as consumers purchase a voucher which give product/services worth much more than the voucher.  It's all a very tempting proposition for those of us with [insert nationality who are stingy] blood. 

Today Trade Me have announced their foray into this field with Treat Me.  As with other websites they launch (such as Trade Me Jobs and Trade Me Real Estate), they have the magic of critical mass.  When you have as many users as Trade Me, it's a no brainer that these users can be tempted into using your other sites, simply by you advertising that they exist.  It was this launch today that reminded me of a discussion I had at the recent Geekzone Pizza evening in Auckland.

A user there mentioned how a family member owned a large chain of beauty and massage salons.  He despised the deal websites as they target a fickle market, eg consumers who are only interested in getting a bargain from any random retailer, and are not interested in becoming a loyal, full-price-paying customer.  He would often get customers asking for similar deals at his salons, but at such a low price, it was economically unviable.

This got me thinking about these sites from the retailer's perspective.

Are these deal websites good promotional tools for retailers, or do they only get you customers until a better deal comes along from a competitor? Are they sustainable, and if not, will these deal sites all die once retailers stop providing offers?

I'm interested to hear what you think, add your comments below.



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nate's profile

 


I'm Nate Dunn, and I work for 3Bit, own Tuihana Cafe, and am a moderator here at Geekzone.

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The views and opinions represented on this blog are personal and belong solely to the blogger and do not represent in anyway those of 3Bit Solutions Limited or any other company.


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