The maker of software for online retailers processed more than $1.6 billion in orders in the quarter.
Zazzle.com will offer the first discount on DailyDeals.com, which launches tomorrow.
The leading daily deal operators, like Groupon and LivingSocial, have focused on offering consumers discount vouchers for bricks-and-mortar merchants in local markets. That approach requires a large sales force to source deals in each market.
However, online-only and nationwide retailers also could benefit from the daily deal customer acquisition model, says Steve Schaffer, CEO of DailyDeals.com. That’s the thinking behind DailyDeals.com, which Schaffer plans to officially launch tomorrow. The site will work exclusively with online-only and nationwide retailers.
While DailyDeals.com is in beta testing it features a $15 voucher for electronics accessories at eForCity.com for $8. EForCity is No. 255 in Internet Retailer’s Top 500 Guide. Tomorrow, when the testing period ends, the offer will be for $50 worth of personalized holiday cards at Zazzle.com, No. 134 in the Top 500 Guide, for $20.
The leading deal operators occasionally run nationwide offers, such as LivingSocial’s offer of a $20 Whole Foods voucher for $10. But those daily deal operators can’t feature too many of those types of offers without turning off consumers who expect local bargains, says Schaefer. “If a consumer signs up for local deals they expect offers from local merchants,” he says. “If a consumer in Austin, TX, signs up and gets too many deals for online-only retailers, that’s not what they signed up for.”
Schaffer declines to disclose the revenue split with merchants, but says it is between the 50% that Groupon typically takes for its daily offers and the 10% to 15% Groupon takes for its Groupon Now hyperlocal offering.
DailyDeals.com aims to learn from the experiences of other daily deal operators, says Schaffer. For instance, because Groupon has attracted scrutiny over its large marketing expenses, DailyDeals.com aims to rely heavily on affiliate marketing and organic search, where it has a top-ranked spot when consumers search “daily deals” in the Google and Bing search engines.
“We don’t have to build a brand around a name like Groupon or LivingSocial,” says Schaffer. “We were smart about our positioning and bought DailyDeals.com. That makes our job easier.”
A recent report suggests that Schaffer might be optimistic about the likelihood of consumers finding his deals. In a recent survey of 973 consumers, a Rice University professor found that 45.3% of consumers who don’t receive daily deal offers said the reason they don’t subscribe to such e-mails is that they don’t know about the operators’ daily deal sites.
Groupon.com was recognized as an innovative e-retailer on the 2011 Internet Retailer Hot 100 list.