The Future of Daily Deals: The Need for Scale, Slower Spending and Moving Past Email
An NPR segment with Arvind Bhatia, managing director of equity research for the investment firm Sterne Agee, focused on the future of daily deals in a comprehensive-yet-concise manner. One of the topics of discussion is the viability of the business model going forward. The overall model of daily deals can work, but scale is necessary, Bhatia says. LivingSocial, in particular, needs to scale even further if it wants to remain competitive in the market. He thinks Groupon still has a future, so long as it can generate profitability. “In the beginning, it was all about, let’s acquire customers at all costs. Now, particularly for Groupon, it’s OK, you’ve got the customers. Now show us how you can make money with this business model. So one thing they have to do is slow down on their spending. And they’re doing exactly that.” Bhatia also touches on the possibility of daily-deals companies moving beyond emails and tapping into search engines to gain new customers. He notes that a quarter of all searches are for local products. (NPR)
