Daily-deal sites achieved stardom almost suddenly and were once all the craze in the payments industry, but their 15 minutes of fame may soon be up.
Daily deal sites are best known for attracting new customers to local businesses and niche markets by offering shoppers discounts and deals. The financial crisis conditioned consumers to grow more aware of their spending habits, which was around the same time when Groupon – a well known voucher site, came into the market in 2008. Shoppers were keen to save money in creative ways, but as daily deals’ popularity grew, so too did problems with fraud, customer service, merchant losses and more.
Some merchants are ready to throw in the towel, and are searching for new solutions. However, according to Wamda a new entrant based in Dubai, named Akoupon, claims it has a new voucher business model that will please both the consumer and the merchant.
Akoupon wiped the traditional coupon model off the board, and started from scratch to help address arising problems. How is the company different from the rest in the industry?
Akoupon is a free platform that gives merchants more control over the distribution and inventory of coupons. In the past merchants often lost money because they were oversubscribing, meaning the number of consumers actually buying the deal frequently fell short. To combat this, Akoupon plans on allowing merchants to determine the number and level of coupons offered. Merchants will be given more flexibility, as Akoupon’s system operates on a “paid-at-redemption” system to prevent sales loss.
Many daily deal companies focus on the “push” model of selling, which means the company attempts to foreshadow consumer demand and sets offers using this strategy. The current business model often neglects the market demand. According to an article in USA Today, many businesses fail to actually know who their customer is and what benefits them. Discount sites must become more tailored to the customers. Akoupon countered this approach, and said it would instead lean towards the “pull” model. This indicates Akoupon will develop offers based on the actual and present customer need.
Another issue that has emerged in the daily deal process is customer complains about wasting their money as vouchers expired and they were unable to claim their deals. Akoupon separates itself from its competitors, and said it will focus on maintaining long-term customer relationships. The company said it will not be a “daily-deals site.” Instead it aims to become a platform that local businesses can use as a way to communicate deals and discounts with people in the area. Shoppers will pay the merchant directly for each offer they purchase, and can then download the coupon for free. Additionally, Akoupon will work to make the customer experience easier, and will require vendors to keep customer data for each redeemed coupon. This way buyers won’t lose out if a printed voucher is lost.
Group-buying and daily deal sites have left a polarizing impression on both consumers and merchants. However if new approaches, such as the one Akoupon proposes, prove to be successful, this could start a new trend in the discount culture.