Ian Brooks, managing director of Puregenie Digital Recruitment predicts consolidation similar to what was seen among tour operators in a sector that has seen significant growth
Guest Post: Be big or niche to survive the daily deals rat race
By Ian Brooks, managing director of Puregenie Digital Recruitment
When you turn on your phone or laptop in the morning, what is lying in store for you?
Far too many new emails if you’re like me, and increasingly a substantial number of those clogging up your inbox are from daily deals websites.
Last week I decided it was time for a purge, and unsubscribed from most of them. As I did this, I wondered how many other people were contemplating or had already done the same.
In the US the market is dominated by Groupon who have over 50% market share, followed by Living Social with just over 20%. 2012 Q2 figures showed Groupon’s share was somewhat in decline.
In the UK accurate figures on the size of the daily deals market are hard to find , but some statistics released by DD Summit 2012 earlier this year estimated that nearly £300 million was generated by daily deals sites in just six months in the UK by over 70 active operators.
The market is indeed incredibly crowded, with many brands jumping on the daily deals bandwagon.
Amazon (which is a shareholder in Living Social and has invested $175 million so far) launched its own dedicated daily deals operation recently, as did Nectar.
Last year, Moneysupermarket made an acquisition in order to get into the market and hit the ground running.
As some are coming in however, others are moving out, with Gumtree and Daily Mirror’s deals site “Happli” closing recently. Facebook also withdrew after a four-month foray into the market.
In terms of the travel space, Travelzoo has been in the market the longest.
Groupon has a partnership with Expedia, and Living Social created a separate brand for its travel offers called “Escapes” (not to be confused with Secret Escapes).
Watch out also for Google, who already own online restaurant review site Zagat and travel guide book series Frommers, which could be used as a platform to catapult “Google Offers”, which is currently in beta.
Recently the market has begun to differentiate with the development of upmarket specialists such as Voyage Privé and Secret Escapes.
Secret Escapes has recently taken on funding of £8m which should ensure its longevity and Voyage Prive is strongly established in France. Dealchecker is another with a strong French parent in Easyvoyage.
From our perspective there has been a significant uplift in demand for staffing in this sector, mainly for sales people to source the deals.
But there surely has to be consolidation in this sector, as people simply don’t want to be signed up to every daily deals site.
Clearly to be successful you need access to the traffic and an endless stream of compelling deals.
My prediction is that the daily deals market will develop along not dissimilar lines to the tour operating sector, whereby those who survive and prosper will either be generalists operating on a huge scale, or specialists operating in a niche.
Puregenie has just released it latest video Youtube marketing campaign highlighting all the ways job seekers can look for their next role including on social media and mobile.
