The number of one day deal sites in New Zealand grows every day. There are dozens of them and many of them now have a separate site for each region with deals for experiences, dining, accommodation, attractions and activities. This is great for bargain seekers, but doesn’t necessarily do a lot for bricks and mortar businesses.
There are scenarios where they have value, for example if a business has very large volumes of aged stock that they need to quit. It can also be useful for new businesses to make customers aware they exist. They also come at a price. The more powerful the site, the more they charge with fees being anything up to 40% of the sale of each item.
If you want to attract new customers to your bricks and mortar store, then obviously you want a coupon or something that needs to be taken to the store for redemption. Even if you are quitting aged stock, there may be advantages in getting people into your store in the hope that they will purchase other products while they are there. There are also benefits to both the customer and the retailer in not having the time, packaging and distribution costs in delivering product to the buyer. More on this in future blogs, looking at check in applications as opposed to group deals.
A study by Rice University found that 32% of businesses surveyed who used Groupon for promotions said they were unprofitable and 40% said they would not do it again. A major issue cited in the research was cannibalising existing business. Mashable quoted a statistic that less than 20% of people who purchased deals where they had to go to a store to redeem them, returned subsequently to buy full priced product.
So the question which I will come to in upcoming blogs is how to get people into your store at quiet times and more often. I believe the answer is in locations based services such as check ins and proximity based marketing. I welcome your experience or opinion on this.
In an article at LBS Zone, LeClairRyan attorney Kevin D. Pomfret says businesses should step forward to educate Congress and executive agencies such as the Federal Trade Commission (FTC) about the breadth and scope of location-based technologies, as well as the industry’s enormous potential.
This is something I have been saying for some time in past blogs. If we get Location Based Services applications right, they can enrich our lives in so many aspects. For example:
B2C Marketing. I would welcome personal location based marketing, based on my location, time and interests. Tell me if there is a hot deal on a new guitar pedal or music software as I drive past a music store on a Saturday. My girls would love to be told there is a 2 for 1 coupon on the latest summer fashion as they walk past a shop and their colors and sizes are in stock.
Health and safety. If one of my relatives is ill and needs medical help while on vacation, a blind or disabled person becomes disoriented, a diabetic travels and forgets their insulin, a car’s airbags deploy on a remote country road. These are all instances where consumers can be aided by LBS apps and help directed to them with ease.
Entertainment. Rugby World Cup year starts in less than 24 hours in New Zealand. Wouldn’t it be great if people can sign up to services that know where in the country they are, what they are interested in and can guide them to other activities based on time of day, interest and location? It could be golf, a cultural performance, Happy Hour, a concert or music festival, you could opt in before hand with your interests so if you are a ballet fan, you don’t get guided to a Christian Death Metal Grunge Fest.
The Road Trip. An application that provides car navigation, access to traffic information, entertainment, allows you to connect to your social networks, upload photos and blog, find ‘friends’ close to you and more.
We’ll see more of these in 2011, along with apps from Facebook, Google, Apple, Foursquare, Groupon, Twitter and hundreds of others. But what about the risks?
When you sign up for these applications, do you know who you are giving access to? Do you know whether you can opt out? Do you know of the service has the ability to delete your information if you decide to opt out. Often the services themselves don’t have that ability because Google and other services have cached it and even if they delete it, it still exists in other places.
It is a well know fact that criminal elements already use sites such as Facebook to identify people they want to commit crimes against. It might be that they want your car, your jewellery, your 65″ 3D TV, all the Christmas presents you displayed on your profile, or just to ransack your house. It may be nothing to do with you, as they say in the movies “Nothing Personal, this is business”.
You could follow this thread and think, this guy is anti LBS. Wrong, its how I make my living. I love it for what it can do for me and you. I just worry about how it can be used and believe it is incumbent on the developers to make the applications as safe as possible, to provide privacy controls and make sure people know how to use them. They might also want to consider liability insurance. I’ve heard of insurance claims by people who drove their cars into rivers because their nav told them to turn right. It won’t be long before there are claims from people saying that it is the fault of the social media location application, which indirectly told a car ring that their expensive sports car would be parked at the airport for 2 weeks.
The article that set me off on today’s blog was about educating politicians, something that needs to happen all over the world, because these applications go international very quickly. It is also necessary to educate the developers because they are focussed on what they want people to be able to do with their apps, not the inherent risks of uses they hadn’t considered. I often want my ‘friends’ to know where I am, but I don’t want people who are not my ‘friends’ to know where I am or where I am not.
This is not my first blog motivated by Pomfret. In September I wrote about Location Based Apps and Trust, prior to that Proximity Based Marketing and Trust, and a whole series of blogs around Who’s Looking at You on Facebook. In one of them I thought up a name at random, searched for someone with that name and found out a huge amount of information about the person. I found it to be very scary, what I could find out about that person. Add location to that mix now and it could become downright dangerous.
Of course the tables can be turned on crims as well as law enforcement agencies can use the same apps to find out what they are up to and where.