US brands target online discount sites

Big US brands are trying to combat customer fatigue by partnering with online discount sites to reach new potential customers. Typically the territory of small and local shops, daily deal sites are increasingly being recognised by national

brands as a viable marketing channel and customer tracking system.

“At the store level and at the geographic level, this makes brands much smarter about who their customers really are,” said Jed Williams, an analyst with BIA/Kelsey. “Whether it’s Groupon delivering that in five years or not, that’s an aside to what group buying has done to move customers to the cash register. Brands understand there’s nothing faddish about that.”

Historically, large brands have had the upper hand in negotiations with daily deal companies, often paying little to no share of the deals. The discount companies shouldered the expense as customer acquisition costs, because the brand recognition helped attract and retain new subscribers.

But Mitch Spolan, head of national sales for LivingSocial, said that dynamic was changing.

“The secret about us is that we say ‘no’ more than we say ‘yes’,” he said.

From American Apparel to Unilever, more and more national brands are using Groupon or LivingSocial to target particular geographic areas where customer numbers are low, or to move inventory in a typically slow quarter.

“We’ve evolved our conversation with national partners from education and awareness to really tactical execution to how we can best leverage this platform,” said Lee Brown, head of national sales for Groupon.

Some brands are not running deals at all but rather tapping into the companies’ huge customer databases – Groupon’s just topped 142m subscribers – to experiment with new marketing campaigns.

Image: Groupon logo
Source: FT ©