Are Money-Saving Group Deal Sites Taking Up Too Much of Your Time?

Dawn Kawamoto

A penny saved, they say, is a penny earned -- which certainly explains the popularity of group-buying websites. But they also say that time is money, which is why you may be feeling as if the daily slog through your inbox's growing list of discount deals is becoming more trouble than it's worth.

The temptation to sign up for "just one more" deal site is likely to become even greater with a host of new competitors coming online soon, featuring an ever-widening range of merchants offering deep discounts in hopes of winning repeat business. Savvy consumers, however, can save both time and money by approaching group buying with a laser focus on the deals they're most likely to be interested in, rather than snapping up goods and services just because the deals look like bargains.

And more options are becoming available for weeding out the deals you want from the deals you don't, say industry players. Aggregation sites are increasingly popping up, and niche group-buying sites are forming rapidly.

Sites to Suit Your Specific Needs

Niche group-buying sites serve a dual role for online publications and websites, allowing them to leverage their existing readership bases and advertising relationships -- for example, ParentsDeals, which was created by the publisher of Parents and American Baby magazines and is hosted on the site. Other niche sites are being formed to serve particular clientele and distinguish themselves from broad-based players like Groupon and LivingSocial, say industry players.

Environmentally conscious shoppers can pick from among such eco-friendly niche sites as GreenDeals operated by Green America, or standalone green site ethicalDeal. Green Box Top offers deals designed for those interested in eating organic and locally grown foods, which likely draws a different crowd than Omaha Steaks' overstocks daily deal.

And the list of niches sites goes on, among them:

  • Spa Sites:SpaRahRah run by spa information site SpaFinder; TheRightDeal operated by spa information site SpaWeek; and Daily Deals run by spa and hotel listing site

  • Luxury Sites:Gilt Groupe, a standalone site that focuses on fashion, home furnishings and travel; Ideeli, a standalone site for fashion, home and beauty; and One Kings Lane, a standalone site for home furnishings.

  • Family Sites:Sweet Deals run by mom's site Mamapedia; Plum District, operated as a standalone daily deals site for moms.

  • Jewish Sites:JDeal, which offers such deals on kosher foods and restaurants; KosherKouponz, which offers discounts on Judaica items from kiddush cups to etrog boxes; and Jewpon, which sets itself apart with a bilingual English/Hebrew website.

Consumers who have signed up for a number of niche sites should consider creating an email filter that redirects all their daily deals into a separate inbox. Setting up a filter for Gmail, Yahoo email, or email using AOL (which publishes DailyFinance) is relatively easy, and there resources out there for other email providers as well.

Reduce Aggravation with Aggregation

Deal aggregation sites like Yipit and The Deal Map provide consumers with another alternative for reducing the daily deal deluge to areas of specific areas of interest and location. Both companies pull their daily deals from hundreds of websites, from niche players like Green Box Top to industry titans Groupon and LivingSocial.

The Deal Map, for example, has 12 categories that range from health and beauty to home and garden to medical, for example. Yipit slices it even thinner, allowing consumers to pick their interests from among 51 categories such as pets, bridal, skydiving or kids. Personalize your profile, and the aggregator sends you only daily deals that fit your interests.

Based on category selections made by Yipit's users, here's how its top 10 categories shaped up:

"We'll add more categories if it makes it easier for users," says Jim Moran, Yipit co-founder, noting that as more businesses try marketing themselves on group-buying sites, a wider range of categories may be needed. "We now have air conditioning repair companies offering daily deals."

Back in February 2010, Yipit worked with 20 daily deal companies and offered a couple hundred deals a month. Now, it aggregates more than 500 deal sites, and offers about 20,000 deals per month, says Moran.

Location, Location, Location

The Deal Map sources its deals from over 400 sites: small businesses, national retailers, and group buying heavyweights like Groupon, says Dan Visnick, the company's vice president of marketing.

popular daily deal categories
popular daily deal categories

Sponsored Links

"People want more relevant deals and want to select from the categories they're interested in," says Visnick. Location is a key filtering criterion as well: 50% of Deal Map's users have taken advantage of the company's mobile app to find deals in close proximity to their mobile device.

But after selecting location as that first slice toward personalizing daily deals picks, consumers will often select more than one category to draw from for their daily deals, Visnick says.

Visnick's gut estimate is that, a year or so ago, 85% of the daily deals came from general deal sites like Groupon and LivingSocial, but that the dramatic rise in niche sites has lowered that market share to around 65% today.

Groupon, LivingSocial Still Rule the Roost

Recognizing the trend, Groupon and LivingSocial are moving to take their broad reach into the niche arena. Earlier this month, Groupon teamed up with Live Nation Entertainment to form a joint-venture to offer deals on live events like concerts, theatrical performances and sports under GrouponLive.

LivingSocial is also forming some categories: It kicked off its Family Edition in November, and debuted its Escapes site for quick, nearby excursions following its acquisition of Urban Escapes last fall.

For now, LivingSocial plans to focus on its existing product offerings, rather than creating a number of new categories, says Maire Griffin, a LivingSocial spokeswoman. She notes that despite the onslaught of niche sites, LivingSocial and Groupon continue to hold about 90% of the group buying market. And both companies' efforts to expand their geographic reach internationally and domestically are keeping them hopping.

Although the number of players in the group buying industry has exploded over the past year with more niche players and aggregators, Forrester Research analyst Sucharita Mulpuru doesn't see any immediate danger for the big sites.

"Most people find out about deals by getting emails from companies like Groupon directly. That's not going to be displaced by aggregators," Mulpuru says.