End of daily deals, or are social deals still ahead?

September 7, 2011 § Leave a comment

There have been a lot of signs recently that social media is prime for some critical pause and reflection. Anemic growth in user acquisition, a sense of fatigue, copycat sites and services, and unworkable business models all point to industry challenges ahead. As Mashable reports, daily deals may be at the end of an era.

The daily deal space was bound to contract. Retailers and marketers know that deals do not loyal customers make. And their novelty has worn off for both customers and retailers.

But most interestingly, deals offered by Groupon and even Facebook failed to become social. Groupon hasn’t yet tried to socialize its deals — using sharing models to enhance deals and galvanize distribution, for example. Facebook, in spite of being ideally positioned, still has difficulty un-intrusively blending commerce with its users’ social networking activities.

The promise of socialized deal distribution, benefiting customers (and their friends), as well as retailers, still stands. And deserves closer examination. Mobile commerce, for example, is nigh upon us. Payment systems should soon provide a boost to both mobile and social networking commerce. And social networking services will inevitably get smarter about what their users (and friends) are interested in.

The daily deal has taken advantage of few of the core benefits of social networking and the real-time social web. These include social graphs, interest graphs, and social interaction models — from connecting to sharing. The deal simply offers a price reduction. And little or nothing by way of relevance, individual or social.

Marketers have long sought after not personalized one-to-one marketing, but socialized one-to-friends marketing. Social, not relationship marketing. This kind of marketing seeks to leverage natural and organic connections, communication, and activity. As far as social commerce goes, then, I see the promise of social deals as yet unsolved.


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