Concern over the industry’s fate has pervaded this week’s Daily Deal Summit. But if yesterday’s proceedings seemed a little glum, this morning’s keynote speaker offered a slightly sunnier outlook.
Betabeat reached Yipit cofounder Vin Vacanti’s talk just in time to hear him teasing out one possible positive scenario. He speculated that the shift from local deals to nationally distributed ecommerce might offer traditional media outlets a second chance to capitalize on the daily deals boom. He used GQ as an example: The magazine is constantly recommending products to its readers, so why not create an ecommerce list and make some money? Though granting GQ might consider the idea heresy, he explained: “With ecommerce, it’s 1, 2, 3, 10 products that can be sold anywhere in the country. The selling experience is a lot easier. It makes a lot of sense.”
Mr. Vacanti isn’t one to cheerlead without cause, so afterward we caught up with him outside the event for some perspective on the state of the industry. Did he agree with David Tisch’s suggestion that the very term “daily deal” has become practically poisonous? “It’s more of a branding issue,” Mr. Vacanti said. The phrase has gotten a bad rap, he explained, but there’s nothing inherently flawed with the business model. Fab.com, for example, has managed to do quite well for itself selling discounted goods for a limited period of time. The industry “would do itself a service” by adopting the name “flash offers” instead.
Part of the problem: “[Observers] thought of Groupon as this $100 billion company, and they’re now an $8.5 or $8 billion company. So people are sort of disappointed. They think it’s been a bust. Well, on the other hand, Groupon is still worth eight times Instagram–and no one thinks Instagram is a disaster.”
To be fair, that likely has something to do with differing user acquisition costs, among other things, but Mr. Vacanti’s point about overinflated expectations is well taken.
While none-too-keen on the prospects for building national businesses on local deals, he also elaborated on the virtues of a broader strategy. Pointing to the success of Fab.com, he said, “I think there’s an opportunity for companies to launch with a curated list of products that are more national distribution, therefore the sales cost isn’t as high and they’re still able to build a huge list.” Plus, local players like city newspapers could still leverage their home-field advantage into a decent (if limited) business.
That’s not likely to inspire a mad dash to launch daily deal sites. Then again, that’s a healthy development.