Next Stop For Daily Deals: Social Networking and Customization

photo: /kallu

Daily deal websites like Groupon and LivingSocial cater to the masses by offering discounts on everything from restaurants to massages.

Now, a new group of websites is trying to target those deals to people’s specific shopping habits or their social networks’ recommendations. From discounts embedded in Internet ads to deals based on previous purchases, these companies want to take group buying to the next level.

Swipely Offers Deals Based On Your Shopping Behavior

It’s not surprising that there’s so much interest in this market. While most people use the Internet to research deals, when it comes to buying, many still do it offline.

Providence, R.I.-based Swipely, live since August 2010, offers consumers the ability to write and share reviews on their purchases – made online or off — with their network of friends. Recently, it added deals to the mix. While it doesn’t run a daily deal, it gives members discounts on things they are deemed apt to purchase, based on what they’ve purchased in the past.

Say, for example, that you shop at iTunes frequently. After a certain number of purchases, you’ll get a credit for free music. The same goes for Amazon.com: buy a certain number of books and get a loyalty credit for future purchases. The credit extends to anything available in the iTunes store and on Amazon.com.  While iTunes and Amazon are the only merchants participating so far, the company is in expansion mode and plans to add more retailers both nationally and locally in the future.

 “It’s way more targeted and specific,” says Angus Davis, the company’s chief executive officer. “Someone who is a known sushi customer is going to be able to see offers [for discounts] targeted at them, like a great new sushi place.”

How does Swipely know your shopping habits?  When you sign up for the service, which is free, you input your credit card and/or debit card number. That enables Swipely to track your purchases.  Once they are imported into Swipely, you can write product reviews, in addition to receiving targeted deal offers.

While review sites are a dime a dozen these days, Davis says its service is attractive because the reviews are coming from a trusted source (i.e. someone in your social network).

“Tens of millions of people are looking at websites like Yelp to see what strangers are saying about a restaurant,” he says, noting it’s better to get reviews from people you know and trust.

ShopSocial Wants You to Share Display Ads

Meanwhile, ShopSocial thinks display ads are still the way to go, with one twist: they are targeted and can be shared with friends.

 “ShopSocial is enabling brands to reward customers for sharing offers with friends,” via display ads, says Todd Parsons, the founder and chief executive officer of ShopSocial.  

How it works: Sign up for a membership, then whenever you see a display ad for a deal that has the ShopSocial logo embedded in it, you can share it with your friends. If someone uses that coupon towards a purchase, you get credits toward purchases from ShopSocial vendors.

For example, Verizon ran a ShopSocial-powered deal offering $25 off its Galaxy family of mobile devices. If a ShopSocial member got a friend to use the coupon, he or she got an additional $25 in ShopSocial dollars. ShopSocial also embeds its “Share to Earn” functionality on companies’ product and Facebook fan pages.  ShopSocial doesn’t disclose how many companies currently use its service, but Parsons says the company is in talks with dozens of brands.

ShopSocial, which launched in November 2010 and is planning to ramp up the service at the end of the current quarter, charges brands a fee to use its platform and is free for consumers. “This is all about giving irresistible offers,” Parsons says. 

The Groupon Way

While start-ups are trying to corner the market for targeted discounts and social networking, daily deal heavyweights like Chicago-based Groupon aren’t sitting quietly on the sidelines. 

Since its inception, Groupon has offered the ability for consumers to provide information so that they can get targeted daily discounts instead of the general ones offered to the masses. It also enables consumers to comment on their purchases by connecting with their Facebook and Twitter accounts, says Julie Mossler, a company spokeswoman.

The daily deal website operator has also rolled out a beta program in a few cities, Groupon Stores, that lets customers follow merchants for news and promotions.  Businesses offering traditional Groupon deals have to offer 50% to 90% off but within Stores, the business can choose to run any offer it wants to. “Even if merchants are not running deals it’s still away to connect with customers,” says Mossler. 
 
The company is also looking at the ability for Groupon users to see what friends are buying on the website, aside from sharing it through their Facebook and Twitter accounts.