Groupon Envy Clutches SXSW
AUSTIN, Texas -- Even in Austin, the Groupon envy is stifling. The entertainment and geek fest South By Southwest Interactive is known for surfacing what's new and what's next, but the biggest, boldest ideas are a lot about Groupon -- and the local-deals market -- and not a lot about much else.
Marissa Mayer, Google VP-consumer products, kicked off the conference announcing Google's latest experiment, a Groupon-like deals product for Google Latitude or Maps on Android phones. Facebook, too, will be updating its Deals platform to get closer to Groupon -- now, users check-in on its mobile apps for discounts and offers. In the coming weeks, Facebook will allow users in Dallas, Austin, Atlanta, San Francisco and San Diego to buy deals through Facebook and share them with friends. Facebook sales' team will bring deals to local merchants and will also source deals through third-party networks like Tippr, Gilt City and Pop Sugar City.
Even the little guys are pivoting toward Groupon. Over coffee at Cafe Crepe, Loopt founder Sam Altman introduced that location-based app's new flash deals. To get rid of limited inventory over the course of hours, merchants can send out Loopt Reward Alerts to get customers to literally come running. While Groupon offers deals within 24 hour periods for use over longer periods, Loopt is trying to help merchants move product much faster. To test the new alerts in Austin, the limited-quantity deals -- say 10 free roundtrip tickets on Southwest Airlines -- pop up on users phone and they literally run to a certain locale to be the first in line.
Another location-based app, SCVNGR, is also jumping into the fray with a new service, LevelUp, which applies its characteristic gaming bent to daily deals. These deals have different tiers -- everyone gets the same deal the first time around, but you can unlock a sweeter deal on the second visit and one that's sweeter still on the third. "The goal is to turn newcomers into regulars," said SCVNGR founder Seth Priebatsch during his keynote.
This is where the copycats are pushing toward the real killer app for merchants: retention. Groupon's already perfected acquisition for new merchants -- offer cut rate deals to a wide list of subscribers to get new bodies through the door. While that model has proven easy to copy -- everyone, from local media to brands are testing their own Groupons -- the daily deals crown will likely belong to whichever startup can figure out how to get those bodies coming back.
Retaining its own customers is already a huge focus for Groupon -- the company has plans to keep merchants and customers coming back through old-fashioned service and CRM tools. Google Deals is also tweaking the model to turn users into repeat customers. The first visit doesn't automatically turn on a discount or offer -- customers have to check in multiple times to gain "Regular," "VIP" or "Guru" status before they can claim the discount. The experiment is only during SXSW for now, but Ms. Mayer said Google plans to expand nationally. (Google only recently turned on check-ins for Maps' 150 million users, so this launch encroaches on both Foursquare and Groupon turf.)
Speaking of the SXSW darling, Foursquare has offered merchants deals through its app for some time now, but new features also demonstrate a laser-focus on retaining customers. During the conference, the check-in app has partnered with American Express to tie transactional data to check-ins and customer behavior. Conference goers can link their AmEx cards to their Foursquare accounts so that when they check-in to a participating Austin business, the credit card automatically loads with bonus cash to go toward a purchase. The deal also means merchants can see transactional data through their analytics tools -- they can see, for example, that the top 20% of customers tend to check-in most frequently, or like one type of deal over another.
"People misconstrue loyalty offers with real loyalty," said Tristan Walker, director of business development at Foursquare. "Offers are just one layer. We need to introduce merchants to the top 20% of customers that contribute 80% of check-ins, shout-outs or spend."