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Groupon Now! and the Mobile Future

Groupon has an instant mobile deal spin-off called Groupon Now! - launched recently in Chicago and fully expected to expand quickly to the other cities where Groupon has operations. The service will offer discounts in real time for businesses in the vicinity of the user’s current location.

"Revealed in March, the service works both through the web and its location-aware iPhone and Android mobile applications. Irrespective of the time of the day and their location, users can use either component to find deals, which have time-restrictions set by the businesses that offer it, in their vicinity."

Groupon is currently using email as its main sales channel, but they believe that in a couple of years, half of the deals will be sold via mobile channels.

According to this expectation, Groupon is already trying to build up relations with existing players in the mobile sector to capture early market share and to gain experience (and data!).

Groupon is first cooperating with location based service Loopt. Loopt users can get Groupon Now! discounts according to their current location. Loopt tracks users’ location continually in the background and is not dependant on active check-ins (which is also possible).

In addition, Groupon is planning a similar cooperation with the well-known location based service Foursquare:

"The arrangement is likely to see Groupon deals targeted to Foursquare users’ check-ins."

The next logical step for Groupon would be to move to a platform based approach in the mobile sector. With an API, it would be possible to standardize interaction with mobile services. And on the merchant side Groupon already has Groupon Stores. Groupon could thus become the intermediary between mobile services and local merchants.

The elephant in the room working in the same space is Facebook: their Social Deals can be linked with Facebook Places and thereby it’s a similar platform approach.

Groupon’s entry into the mobile market couldn’t be soon enough. The location based service SCNVGR is already showing success in several US cities with their LevelUp service:

"With LevelUp, SCVNGR is competing with local deal programs like Groupon and Living Social by offering a series of three deals to consumers, who unlock each one as they try out a business. Encouraging customer loyalty is radically different new twist to the daily-deal market.

Two months into a pilot program in Philadelphia and Boston, LevelUp says it has about 200 SMBs offering deals to 100,000 registered users, divided equally between the two eastern cities. The company said its high-watermark for a daily deal has been 1,400 takers. ”By volume, we are already in the top three players in Boston and Philadelphia,” Priebatsch said. “[On] any given day, it’s Groupon, LivingSocial, LevelUp … which is pretty sweet.”"

Related posts:

• What Facebook is Doing Right With Social Deals
• Is Groupon Developing in the Right Direction for the Long Term?
• Groupon Stays Independent and Everyone Gains
• Groupon App Helps Merchants With Groupon Redemption

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.

US Investors Value Catch of the Day At $200 Million

The Australian Catch of the Day from the Leibovich brothers has announced their first big financing round. Internally, employees were informed about it on Thursday ("It's a big deal"):

"We have some very significant news.

An investment consortium of Tiger Global management (Investors in Facebook, Zynga and LinkedIn), James Packer’s Consolidated Press Holdings, Andrew Bassat from SEEK and Glenn Poswell from Gannet Capital have just acquired a minority stake in our business and become our partners.

The deal values our company at $200 million, making it the largest investment in the Australian ecommerce sector to date. We should all be very proud of what we have achieved."

The valuation of Catch of the Day significantly exceeds that of Woot! when they were sold to Amazon in 2010. On a side note, the Catch of the Day sister site Scoopon is also making headlines regarding their legal troubles with Groupon.

Catch of the Day is targeting 2011 revenues of $120 million (AUS). Plans are to launch two other specialty sites - Brandstreet for fashion and Grocery Run, based on their popular grocery service.

Exciting Commerce has reported on Grocery Run a number of times already on our German blog. Currently COTD is running Grocery Run campaigns twice a month. Here is a fascinating video report which includes an insider peek into the Grocery Run operations.

"The Grocery Run comes around twice a month. On the day we will list up to 150 different products on the first day and we will add another 50 the next day. We can basically sell up to 8.500 products an hour when the sale goes live."

This is what Catch of the Day looked like in its early days. What a difference to its current site:

It was unfortunate that Catch of the Day was not able to participate at the Live Shopping Days 2011 conference as was originally foreseen.

Congratulations to the COTD team who are continuing to demonstrate how exciting and varied e-commerce can be. You’ve shown that you don’t need a huge American or European market to take a good idea and execute it successfully.

For orientation purposes: the Australian market has only 22 million residents.

Related posts:

• Catch of the Day Plans to Grow from $60 Million to $100 Million
• Scoopon: Catch of the Day Not Resting On Their Laurels
• Catch of the Day on its Live Shopping Year in Australia

Originally posted in German as two posts (1, 2) by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Vente-Privée Joins Forces with American Express, More Than Just “Deals”

To curb the cost of international expansion, Vente-Privée is cooperating with American Express on a 50:50 joint venture. The combined effort is due to go online in the US at the end of 2011. A name for the joint venture is yet to be decided.

Business Insider published a summary of an interview they had with Vente-Privée founder Jacques-Antoine Granjon where he discussed the planned US start.

In the interview, when asked about his competitors, Granjon remarked:

"Everyone is rushing into this. All they can think of is deals.

I don't think that's what works. What works is offering something really special, and doing it over the long term.

Of course, if you offer something for really cheap, people will visit. But how long is that going to last?

As for Amazon, flash sales aren't their job. Flash sales are about doing events for businesses. Flash sales happen because a brand has a problem, so you do an operation to solve that problem. It's a completely different business.

And when Gilt says they're going to open new verticals, and open full-price e-commerce sites, they're becoming just another e-commerce company.

No, we're about something else. We're about doing something special.

What we want is for something to happen every day that's so special that people come. And with those daily events, we create an addiction.

We don't do e-commerce, we do events."

It seems that despite the large number of players now operating private sales clubs, there is still scant understanding that the live shopping concept is more than just offering deals for bargain hunters.

Exciting Commerce has been preaching this way of thinking for years and in particular at the Live Shopping Days conferences.

Further activities revealed by Jacques-Antoine Granjon in the interview with Business Insider:

"We recently bought a company in Northern Europe to improve our inventory. We're starting a joint venture to sell last minute event tickets. There's tons of stuff."

Vente-Privée will be represented next October at the K5 Conference in Munich.

Related posts:

• Vente-Privée Grows 15% in 2010 to About 780 Million Euro
• Vente-Privée Targeting the USA
• Live Shopping Now A Tech Megatrend in Silicon Valley

Originally posted in German as two articles (1, 2) by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Shoedazzle Raises Another $40 Million For Subscription Shoe Service

Shoedazzle, an American company which offers a subscription shoe shopping service, has raised another $40 million:

"ShoeDazzle, an shoe-buying club cofounded by celebrity Kim Kardashian, has just closed a $40 million round led by Andreessen Horowitz, which will contribute $30 million."

Shoedazzle counts along with Birchbox and others as an e-commerce favourite of the investment community (“Who Has The Stuff To Become The Next Zappos?”).

In the German startup scene it has been speculated for a while now why the Samwer brothers haven't long ago launched with a clone. But perhaps Zalando throws up some interference in this regard.

In England, Index Ventures and Accel Partners have invested $8 million in StylistPick (press release).

More details on AllThingsDigital.

Related posts:

• Bonobos, Birchbox & Others: Who Has The Stuff To Become The Next Zappos?
• Shoedazzle Gets $13 Million from Lightspeed Ventures

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Voyage Prive To Expand to the US With Ideeli As Partner

Not only is Vente-Privée on the leap across the Atlantic. Voyage Prive, the largest members-only travel shopping site, has decided to partner with US flash sale site Ideeli to bring their travels deals to Americans:

(Voyage-Prive Revenues, in M Euro)

"Beginning this summer, ideeli members will have access to an enhanced and co-branded travel channel on ideeli, with over 100 monthly sales curated in partnership with the expert sourcing team at Voyage Prive. Events will feature coveted hotel, cruise and travel packages to destinations around the world."

More in the press release. The source for the revenue growth figures is the Journal du Net.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

What is Gilt Planning After Their $138 Million Mega-Financing?

Vente-Privée and Gilt Groupe are the key players in the battle to be the world’s leading private sale shopping club. Gilt Groupe entered into the top 50 of US online businesses with their 2010 revenue of $425 million (+150%). Vente-Privée is betting on their jump across the Atlantic.

In a mega financing round, Gilt has raised another $138 million:

"Participants in the fifth round include the Japanese-based telecom conglomerate Softbank Group as well as Gilt’s previous investors, General Atlantic and Matrix Partners.

Other new investors include: Goldman Sachs, New Enterprise Associates, Draper Fisher Jurvetson Growth, Pinnacle Ventures, TriplePoint Capital and Eastward Capital."

The money will be used primarily for acquisitions and launching new verticals:

"In the next couple of months, Gilt has committed to launching a gourmet food site and a full-priced men’s online retail apparel site, but others are also on their way."

Gilt tests potential new markets by trying out specifically selected offers on the main site and monitoring the sales results. They discovered that pet supplies is not a good market:

"To find out what vertical we’ll do next, we generally do ten sales on the site and see how it works. We did a lot of men’s full-priced sales and they went very well.

We’ve had a lot of pet sales, and they haven’t done as well. We try lots of things…Any of these could be set up as a new category."

Coinciding with the financing round, the interview with Gilt CEO Kevin Ryan on AllThingsD is a worthwhile read. Kevin Ryan sees only one international competitor, Vente-Privée:

"There’s only one player in the world to watch. Reports say Vente Privée will enter the US in the next nine months. But if you weren’t covering this business, you would have asked “Who? I never even heard of them.” That’s the reality, and for them to enter, they’ll have to set up warehouses and sign up members. Basically, you are a start-up…I don’t worry about international players, even ones that are bigger than we are."

This of course also applies to Gilt Groupe when it comes to other countries. Gilt is therefore starting a Japanese subsidiary next, since they won’t be the fourth private sales club there, but rather the first.

Also noteworthy is the statement about the geographic distribution of Gilt’s customer base:

"I thought the majority of our sales would come from outside New York, where people have access to sample sales all the time. But I was really wrong. It turns out that New York is by far our biggest market. People may be working only two blocks away, but they are busy. They are partners at Goldman Sachs. They don’t have time to go stand in line, but they can sneak online for five minutes."

This is supposed to be the last private financing round before Gilt goes public. A date for that is not yet known.

The European entry for Gilt is reported to be Ireland in September, where 200 employees are planned.

Related posts:

• Vente-Privée Targeting the USA
• Gilt Groupe Exchanges CEO, Kevin Ryan Takes Over
• How the Gilt Groupe Wants to De-Throne Vente-Privée

Originally posted in German by Marcel Weiss and Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Amazon Starts Javari In Germany, MyHabit in the USA

In addition to Javari’s global presence in the USA, Japan, England and France, Amazon has now expanded the operations (German press release) of the shoe and handbag business to Germany:

Is this a cause for concern for Zalando and others currently occupying the German market? Not really. Not even Amazon has really grasped yet how properly engage women with online shoe sales.

In parallel, Amazon is moving forward with their live shopping offensive and is bringing a rebranded BuyVIP to the US as MyHabit (press release).

Noteworthy: on both e-commerce sites you can log on with your Amazon credentials, which is surely a mode which Amazon can use in the future as a sort of “Amazon Connect”. Such a service could then be opened up to other e-commerce sites.

In the long standing rivalry between Amazon vs. eBay, the private shopping club market might have been another battlefield, if not for eBay’s decision to exclude Ruelala from their recent takeover of GSI Commerce. Perhaps the German Brands4Friends can make moves towards the US.

Related posts:

• Amazon’s Aggressive Entry into the Live Shopping Market
• Javari: Amazon Expands Shoe Retailer To France
• Amazon Launches Javari Shoe Site in England and Japan
• Jeff Bezos On Amazon’s Fashion Strategy
• Fed Up With Investors? - Zappos Moves To Amazon

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Vente-Privée Targeting the USA

For a long time, the mother of all private shopping clubs had hesitated with an expansion across the Atlantic. But now it would seem that Vente-Privée is making a move to the USA.

According to French news agencies, Vente- Privée will be announcing a “partnership with a global company” on May 12th.

One can speculate on the reasons behind the surprising change of tack. In 2010 Vente-Privée performed underneath their self-imposed targets. In 2007 they brought on the American investor group Summit Partners on board with a 20% minority equity investment.

The American market for private sales clubs is currently in a lot of movement. Hautelook has recently been bought by Nordstrom. Ruelala will continue to be independent despite the takeover of GSI Commerce. Ideeli has recently raised $41 million of growth capital, and Gilt Groupe is in the process of stocking up their warchest to up to $100 million. In the second row, One Kings Lane, Zulily and others are also making a jump forwards.

Related posts:

• Vente-Privée Grows 15% in 2010 to About 780 Million Euro
• Gilt Groupe Raises Up To $100 Million Fresh Capital
• eBay Takes Stake in Intershop with GSI Commerce
• How Vente-Privée Wants To Grow From 1 to 10 Billion Euro

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

What Facebook is Doing Right With Social Deals

As announced last Fall, Facebook wants to become an engine for social commerce. Moving in this direction they have test launched Social Deals in selected US cities. “Social Deals” is Facebook’s response to Groupon and LivingSocial and is the second deal program from Facebook after “Check-In Deals” (originally called Facebook Deals, but now renamed to avoid confusion):

 "Check-in deals are free to users; they’re mobile centric and operate like conventional coupons. By contrast Facebook’s new Social Deals, like Groupon or LivingSocial, must be purchased up front using money or Facebook Credits (the first use for real-world products/services). You actually buy a voucher that is then redeemed offline."

Like Groupon, Social Deals focus on local businesses. Besides offerings which are arranged by Facebook’s own sales team, deals are also piped in from eleven partners:

• Gilt City
• Home Run
• FreshGuide
• PoweredByTippr
• KGB
• Plumdistrict
• Zozi
• OpenTable
• ReachLocal/DealOn
• Viagogo
• aDealio

The goal of Facebook is to focus on offerings which already contain some kind of social component, an example being events. This makes sense: such deals would spread the fastest on Facebook’s newsfeed.

Facebook has selected a fairly self-evident redistribution mechanism which is nevertheless interesting to examine and is already more or less built-in to the network:

"you can Like deals without buying them — or before buying them. If you Like a deal it will be exposed through your feed.

You can also share and privately invite selected friends and ask them to join you or expose them to a deal. Facebook users can message each other and discuss the deal as a group before collectively buying."

A similar example has been detailed in the Live Shopping Day’s presentation on the Social Web pattern:

‘As end user I see in my stream a deal which I find interesting (example: discount theatre tickets). At this point I am not yet sure if I want to buy it. I click on a “maybe” or “interested” button.

My ambivalent interest on the tickets is communicated to my network of friends. Very similar to how clicking on “Like” on a website transfers the content to my Facebook newsfeed. My friends can then react and contribute their opinion like “hey, we can both buy tickets and go together”.’

The visibility of the deals should be pretty well guaranteed on the Facebook platform:

"Like traditional daily deals Facebook Social Deals will come through email but also through the Facebook news feed. And they may potentially be exposed via Facebook Ads as well."

Participating merchants will need to set up a Facebook Page. What may at first seem like a bureaucratic task: it is actually a way to help convert bargain hunters to regular customers. Particularly interesting in this context is the bi-directional boosting effect between Facebook Page and Social Deals:

"With Facebook Social Deals local merchants can direct new customers to Like them on their Page and — voilà — they have a CRM platform. Merchants can then potentially start a “conversation” with these new customers.

While many SMBs set up a Page and then wonder “What now?,” Facebook’s Emily White says deal buyers (new customers) will help flesh out and populate content on SMB Facebook Pages. Indeed, this is the secondary mission of Social Deals — to get more SMBs to create and then really use Facebook Pages."

All of this seems much better thought out than Google's reaction to Groupon, which has also recently gone into test phase. While Social Deals seems like a logical extension to the core business of Facebook, Google Offers is like a clumsy effort thrown in to not miss the boat.

Facebook has over 600 million active users and for this mass, has perhaps the most efficient distributions channel on the net (the newsfeed). They can concentrate their deal offerings on where they operate best: social.

Anything to fear for Groupon, LivingSocial and the others? Not necessarily. Like many new markets, we are finding ourselves at the beginning of a growth phase. We are therefore not talking about a zero-sum game where the market growth of one player is at the cost of the others.

Furthermore the launch of Facebook Places last summer has shown that a market entry by Facebook is not necessarily a knock out blow to specialised startups. Foursquare, for example, is getting along just fine.

More interesting is whether or not Facebook at some time will develop platform components for Social Deals in the same way as they have done for Facebook Places. Such a move would make sense and would be consistent with the business development strategy that the social network giant has demonstrated in the past.

Facebook will be accepting Facebook Credits in addition to credit cards as a method of payment.

Related posts:

• Facebook As Social Commerce Engine? 
• One Click Gestures and the Social Web Pattern in E-commerce
• Is Groupon Developing in the Right Direction for the Long Term?

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.

Etsy Tech Talk: Moving Fast At Scale

Etsy has recently offered a few new good insights into the working style of their development team ("Moving Fast at Scale").

etsy on livestream.com. Broadcast Live Free

Etsy is trying to maintain their startup tempo and is constantly updating their site with an almost second-by-second pace.

Lately they have been pulling in strong revenues – they grew in March (+77%) at a rate not seen since a year ago.

Related posts:

• Etsy Grows Revenues from $180 Million to $314 Million
• Extras: 3D-Printing, Groupon Guide, Etsy, Google, Facebook
• Etsy 2008-2010: Business Growth Under the Microscope
• Etsy Raises Another $20 Million and Picks New COO
• Etsy 2010: How Social Can Commerce Get?

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.