Facebook Adding Local Offers to Deals Program

Discussion
Mar 15, 2011
George Anderson

Facebook is getting ready to test what Bloomberg News described as
a “Groupon-inspired
service.”

The new program will involve adding local offers, initially in
Atlanta, Austin, Dallas, San Diego and San Francisco, to its existing Deals
program. Facebook members will be able to share the offers with others on the
social media site.

“Local businesses will be able to sign up to use this feature soon,
and people will be able to find Deals in the coming weeks,” according
to a Facebook statement.

Emily White, director of local operations for Facebook,
told the Financial
Times
, “You dine out, you go to concerts, you do outdoor activities.
We want to make sure those experiences are maximised.”

Facebook’s
program also let users see offers from a variety of partner services, including
Gilt City, HomeRun.com, KGB Deals, ReachLocal, Zozi and more.

“We are very excited about the Facebook partnership. They are an extraordinarily
strong company with the largest number of page views on the web,” TJ
Sassani, chief executive of Zozi, which specializes in vacations and adventure
trips, told the Financial Times. “That’s helpful when we
talk to merchants.”

While the Bloomberg report suggests that Facebook
may be ready to take on Groupon, LivingSocial and others in the daily deal
business, it doesn’t appear as though the site is really looking to do that,
according to another piece on GigaOM.

The piece, written by Ryan Kim,
says Facebook seems more interested in aggregating deals for its members to
share rather than go all-out to compete with Groupon. Facebook doesn’t have
the infrastructure currently in place to compete, he concludes.

“To create a successful local shopping service, you need scale and big
sales teams,” wrote Mr. Kim. “That’s one of the reasons Google
still struggles in this area, because it still doesn’t have much of a
local sales force.”

Discussion Questions: What do you see as the pluses and minuses of Facebook getting into the daily deal business? Do you think Facebook should go head-to-head with Groupon?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

16 Comments on "Facebook Adding Local Offers to Deals Program"


Sort by:   newest | oldest | most voted
David Biernbaum
Guest
10 years 1 month ago

Facebook has every reason to give Groupon a try, however, I’m confident that Mark Zuckerberg and his team will be careful not to kill their own golden goose and the eggs it produces for Facebook.

Charlie Moro
Guest
Charlie Moro
10 years 1 month ago

Competing with Groupon and developing a sales staff may not be the best way to approach the downside to this. The secret to this may be the vast amount of time people and business owners spend on Facebook currently. They may be self motivated to create deals and offers for fellow members that at the end of the day may be more profitable than Groupon by removing a step.

Paula Rosenblum
Guest
10 years 1 month ago

Facebook has a seriously captive audience, and FB ads can be targeted with a LOT of specificity.

I see no reason why it shouldn’t be a win for local businesses. Less effort than tweeting your life away, with the opportunity to let the community work FOR you.

I like it.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
10 years 1 month ago

As the piece points out there are elements of execution that need to be in place to succeed, however, this is an inevitable trend and Facebook is well positioned to make a run given the virtual crowds that congregate there. Aside from the access to customer crowds that it provides, this should excite local businesses because it will take their best marketing tool–local word of mouth–to a new level without costing them very much.

Dan Berthiaume
Guest
Dan Berthiaume
10 years 1 month ago

Facebook absolutely should give online discount offers a try. Clearly Facebook is attempting to evolve into a major IT entity along the lines of Google or Microsoft, and it appears to have the user base, funding and IT expertise to make this a realistic goal. Facebook may or may not succeed, but kudos for thinking big. I wonder if the Winklevii ever envisioned something like this?

Steve Montgomery
Guest
10 years 1 month ago

Multitasking seems to be the “it” thing. Everyone wants one thing to do everything. We want our phones to be everything from a phone to a TV receiver, etc. Now people are asking if Facebook can be Facebook and Groupon. My answer is no.

While not a friend of Facebook, I know it is extremely popular and beloved by many. I don’t see them risking what they have created by trying to create a direct competitor to Groupon. I do see Facebook adding access to discount via collaboration with others as a value add pointed out in the article.

Ron Margulis
Guest
10 years 1 month ago

One more reason why Google needs to look over its shoulder. As Facebook becomes more of a social search engine than strictly a network, users will poll their friends to find out what products work, which offers are worthwhile and where to spend their vacations. Already I’m seeing review postings of good and bad restaurants, hotels and products, and I expect to see more.

Lisa Bradner
Guest
Lisa Bradner
10 years 1 month ago

Facebook desperately needs a real monetization engine and certainly they have the scale of users to make deals happen at scale. I think there’s a flaw in the Groupon/Living Social model in that they really by nature work best for expiring inventory (hotels, massages and the like). Facebook would be smart to do something different–connect local merchants and businesses with consumers at scale. As always, though, if they push too much they’re going to frustrate their users. Permission based local offers that you can opt into via smart phone((30% of all social activity comes from a mobile device) make a lot of sense. Spamming from businesses just because you’re in the neighborhood does not.

Bob Phibbs
Guest
10 years 1 month ago

“…it will take their best marketing tool–local word of mouth–to a new level without costing them very much.” Really? Really?

Look, I get it. It can be exciting having the energy and buzz delivered by a promotion such as Groupon, Facebook or the rest. But the manic energy you are pulling into your business comes at a very high cost. It also comes from the fear that you do not have a compelling reason customers should shop with you other than a discount.

The best businesses have taken a hard look at who they let on their sales floor, how they create a compelling shopping environment, and what assortment of merchandise they will carry. From that, these businesses created a unique selling proposition, one that lets their store’s energy flow outward and draws customers in.

The more these sites prey on the merchants fears, the stronger the sites become and less compelling the merchants become. That’s why I tackled this subject in depth beginning here.

Cathy Hotka
Guest
10 years 1 month ago

Everyone will be doing this. The Washington Post now has a daily offer.

The next step is a massive shift from B-C to C-B. Finally, customers will be able to indicate what they’re interested in, and get retailers to respond. This isn’t a threat to the traditional retail model, but an opportunity to increase sales by being more responsive.

Rick Moss
Guest
10 years 1 month ago

I agree with those advising Facebook to remain one or two steps removed from the Groupon model.

Recently, we took advantage of a Groupon offer at a local restaurant and spoke to the manager about her experience with the company. I was impressed to learn how much of a “people company” Groupon is. The manager was very proud of the fact that Groupon had sought out her business and come in to have a meal, sitting with them at length to develop the relationship.

Groupon is building a vast network of locally-oriented salespeople and is earning trust the old fashion way. Facebook is learning many things, but they haven’t given this a try yet and not sure they should.

Joan Treistman
Guest
10 years 1 month ago

Once people were accustomed to using their computers and the Internet as a faster and more efficient way to interact, we heard complaints about the time it took to boot up. In other words what took us several days now took us minutes and the extra seconds to boot up were/are seen extreme barriers.

Almost everyone is on Facebook. If you’re already there, the opportunity to do more in that space can be seen as a real advantage and therefore direct access to local shopping discounts makes sense. My only concern would be the potential barrier created by the clutter of retail offers posted along with all the other postings. But I’m not sure if that is a potential barrier or a small hiccup associated with greater efficiency for marketers and shoppers.

Doug Stephens
Guest
Doug Stephens
10 years 1 month ago

The thing that’s tough to wrap our heads around is that Facebook as we know it, is no longer simply a “service” or specific “social application” it’s a media channel. As a media channel, Facebook can essentially play in multiple spaces and experiment with bringing content and services to its members based on what’s current and fashionable. None of these experiments constitute a departure from Facebook’s core model. The promise of Facebook has always been to simply allow its members to share and whether that’s photos, videos, birthdays or deals of the day matters not.

The beauty of this model for Facebook is that a failed experiment with any new form of service or content doesn’t hold a lot of risk. They can afford to try new things.

Bill Hanifin
Guest
10 years 1 month ago

There are many ways to distribute a Groupon-like offer to consumers and Facebook is obviously a great big pipe through to make the offers.

For those who believe in data-driven and financially measurable marketing strategy, they might recognize holes in Groupon which need to be plugged if it is to be sustainable over the long term.

I would think a partnership between FB and Groupon would make more sense than for FB to set Groupon in its sites.

Doug Fleener
Guest
10 years 1 month ago

Why does it seem every new service has to be a “Groupon” like offer? Smart retailers will see they can leverage these services without giving away what little margin they have. As I tell retailers every week, don’t commoditize yourself!

Phil Rubin
Guest
10 years 1 month ago

Facebook getting into the “deals” space is a serious threat to Groupon, along with Living Social, which given Amazon’s backing is not one to take lightly either.

I’m sticking by my previous comments that Groupon would have been wise to take the $6 billion that Google offered. Long Facebook & Living Social/Amazon and short Groupon.

wpDiscuz

Take Our Instant Poll

What would you put as the likelihood of success should Facebook decide to compete head-on with Groupon and others in the daily deal business?

View Results

Loading ... Loading ...