When Amy Bailey decided to offer discounts to her customers through an online daily deal, she racked up more than 3,000 new names for her business' e-mail list and $120,000 in business.
Online deal sites such as The Augusta Chronicle's Daily Deals, Groupon and LivingSocial are changing the way many businesses advertise, and how consumers shop.
The co-owner of Rhinehart's Oyster Bar was looking for new ways to do business during the economic downturn because customers who once visited her restaurants three times a week could afford to come only once a month. She started using Daily Deals six months ago.
"In this economy, we're constantly changing the way we advertise. The biggest thing that propels you to do something like the Daily Deals ... you have to think about expanding your customer base," Bailey said. "These people chose to get e-mails from me. These are people who are very interested in going out to eat and doing stuff. It introduced a tremendous amount of people who actually live here and spend money here. It really blew everyone's mind how much we sold."
The sites offer discounts on a retailer's regularly-priced merchandise, but only if a certain number of people click on the Web site's deal. The retailer decides what the sale will be.
The craze started nationally with Groupon, which launched in November 2008 in Chicago.
"Groupon just caught on fire. There are consumers who will tell me they're addicted to Groupon. Consumers have become so excited about this that every day they look at their cell phone or computer to find what's on sale at Groupon. It has become the hottest thing in advertising," said Dr. Marianne Bickle, director of the University of South Carolina's Center for Retailing. "Businesses, in general, that aren't doing it really should be doing it."
Morris Communications Co. launched its Daily Deals program in August. It is offered in 10 markets. It was the first daily deal site in Augusta. Groupon entered the Augusta market a few months ago.
Brandy Sanders, of Augusta, has purchased numerous Daily Deals, from Somewhere in Augusta, Sweet and Green, CSRA Life Saver, The Balanced Body, Bliss Salon & Spa, Top Notch Express Car Wash, Mi Rancho Mexican Restaurant, Steak-Out and HoneyBaked Ham.
Daily Deals gives her an inexpensive way to try new businesses. She bought a special for cleaning services from Sweet and Green and now she's a regular customer.
"Some of my favorites have been the deals to local restaurants. I am really into couponing and trying to find ways to buy things that I need and want at a bargain price. Everything I've bought, I've felt that it was a good value. I've never had a problem redeeming the vouchers. I'm a very strong advocate of the Daily Deals," Sanders said.
Miguel Angel, operations manager at Salsa's Bar & Grill, said the advantage of the new approach is being more certain, compared to a regular coupon, that it brings in customers -- since they bought the deal online.
"In this case, we have a 100 percent guarantee that they will come to our restaurant. Most people who buy a voucher, a $10 voucher, will spend more than that. So I think it's good for us. More and more people are going online for things, and one of those things is vouchers like this one," Angel said.
Neapolitan Cupcakes & Gift Shoppe opened six months ago in west Augusta, and owner Molly Meek used Daily Deals as a tool to draw new customers to the business. In one of her promotions, she was able to sell more than 300 deals to customers.
"People who otherwise probably wouldn't have come in," Meek said. "We had a lot of people use the Daily Deals towards birthday parties and birthday orders. It's definitely a great awareness-driving tool."
Adventure Crossing created a new revenue stream with Daily Deals, which is helpful during the off season, said marketing director Gabby Benton.
"Our ultimate goal with using Daily Deals is to help build our database. In this day and age, I think database marketing is so key and something that's so inexpensive for people. For small businesses to be able to build a database and market directly to them is the most powerful thing you can do," she said.
Bailey, Rhinehart's co-owner, has tried both Groupon and Daily Deals. She said that Groupon didn't have the same impact because many of the consumers in the database are not from the local area.
"The Daily Deal program has been a phenomenal success for everybody involved. We're happy we're able to do it and help local businesses," said Don Bailey, president of The Augusta Chronicle .
Rhinehart's Oyster Bar remains the program's number one seller with more than 5,500 deals. The Pizza Joint recently came in second with 3,347 deals sold.
Restaurants benefit because patrons usually end up spending more than what they paid for the Daily Deal, he said.
Groupon did not respond to a request for comment.
Consumers are changing their shopping habits, but Bickle doesn't attribute this change in behavior to the deal sites.
"I don't think Groupon changed the marketplace. I think 2008 changed the marketplace forever. When the economy crashed, it taught consumers, similar to the Depression. Consumers who lived through the Depression do not shop the way baby boomers shop. It's a fact," Bickle said.
Technology has also affected the way consumers shop. Research shows that online shopping is increasing at an accelerated rate, Bickle said.
"Groupon, because it is an online format, is simply benefitting from the acceptance of technology," she said.
Daily deal site Groupon Inc. filed paperwork Thursday for its highly anticipated initial public offering of stock.
The regulatory filing sets the potential value of the IPO at $750 million.
-- Associated Press
Is it just me or is it incongruent for someone to be eating out and having to use Groupons or whatever you call them?
Douk, heck, I've not only tried frugality, I've tried poverty. But that's my point. If you are truly trying to be frugal why go to the restaurant to begin with? I dunno...maybe just me.
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