An Open Letter to the Australian re. Amex
Comments on Fran Foo’s piece ‘Amex launches Facebook couponless deal’
I am the CEO of an Australian start up who is building a mobile shopping app in this space. I am currently keeping a keen eye on overseas trends in mobile shopping/ offers. We are also pitching ourselves as the antithesis of Group Buying as we are truly personal, hyper-local and now – and we won’t be compromising brands or margins which the daily deals sites are widely accused of. We don’t serve up Group Buying offers, but relevant offers based on shopper preferences where there is no minimum of buys for the deal to go live.
In September I will be engaged in a public debate hosted by the Australian Direct Marketing Association on the ‘Cons’ side of Group Buying. So that gives you the context of my comments!
I think there are some key points of difference between American Express and the daily deal sites that Fran missed in her article. I also think that Scoopon general manager Jon Beros might be missing some key points about how American Express is now lifting the group buying game to another – and in the future – more successful, highly defendable level.
* Merchants won’t need to be a Daily Deals site to administer their offer. At the moment Spreets etc are turning away merchants – with ‘Link, Like, Love’ retailers can list a deal directly. This means that their can be many deals in the system, which means there are many more opportunities for personalisation – something the Daily Deal sites don’t have, creating ‘Deal Fatigue’.
* ‘Link, Like, Love’ offers are truly local (or hyper local) as retailers can reach customers who are around them now. Daily Deals sites have to offer deep discounts to attract new customers (and a lot of current customers as it turns out) from the region.
* Merchants can get real-time data on how their offer is going – whether it is a one-time only offer, or a loyalty offer. That means merchants can truly understand if loyalty is being created with their one-time offer, or not. The lack of loyalty that Daily Deal sites create is a bug bear with retailers, and currently these sites have no way of understanding or reporting on the loyalty created by their often loss making offers.
* American Express has the opportunity to enable retailers to use shoppers transaction history for real benefit. Retailers one day might be able to target shoppers based on their location, and what they have bought before. This information is very powerful and is the future of real-world, data driven shopping.
* Finally, Daily Deal sites take 40 – 60% of transactions, American Express is taking nothing except its usual merchant fees.
Now all of the above should be sounding alarm bells to the Daily Deals companies here. In the US, Groupon and Living Social are experimenting with lots of activity outside the usual daily deals site status quo – but they will have to move quickly if American Express really harnesses the power of their merchants and 750 m Facebook users.
Read Fran’s article here: http://www.theaustralian.com.au/australian-it/amex-launches-facebook-couponless-deal/story-e6frgakx-1226101605509