For example, when we ran King Pin Donuts in Berkeley, CA for a week, 1,573 people claimed a free donut when it was limit 1 per person.”īut the startup also makes money, “We don’t always offer 100% off. It drives a significant amount of traffic to the establishment. Says co-founder Jason Wang, “We were surprised in the beginning too, but merchants are willing to give out ‘freebies’ since we focus on dishes and not the entire menu. Customers can redeem their deals immediately, a food industry-specific convenience that Groupon seems to have caught onto with its Groupon Now concept.īecause it takes less of a cut than Groupon, Munch On Me can get merchants to give out larger discounts as well as items for free in hopes of bringing more people into the store. The Munch On Me discount focuses only on one item, and restaurants can upsell after the initial sale (“Would you like fries with that free milkshake?) and can keep offering up deals. Any business who’s been a victim of the Groupon effect knows why this is important, namely because restaurants can prepare for the demand in advance, overloading on the inventory they expect will sell out. But wait, before you click away to a slideshow about hot coders, Munch On Me ( Y Combinator Summer class of 2011) has got some features that might just reroute you from relying on the big G for your munchies back to its sweet sweet embrace.įirst of all, Munch On Me focuses on giving discounts on specific dishes, instead of on anything in the entire restaurant. "They'll all continue to overlap, but you'll see some specialization, too.Munch On Me is a daily deals site for food. "Groupon has headed more into selling actual goods, while LivingSocial has been focusing more on local, like live events and concerts," Kabani says. Still, Yipit thinks there's room for more than one daily deals leader. They usually hold only 5% to 10% of the market each at any given time. The list of who follows them fluctuates a bit, but Travelzoo, Google ( GOOG, Fortune 500) Offers and AmazonLocal ( AMZN, Fortune 500) usually round out the top five, according to Yipit. Related story: LivingSocial: Things are going to get worseĪfter Groupon and LivingSocial, market share drops off precipitously. It's easy to make a website, but not so easy to get people to visit it." "A lot of it is people realizing how expensive it is to enter and to do well. "In the long tail there might be sites going in and out, but not the levels from before," says Kabani, the data manager. Yipit used to track the dozens of monthly entries and exits into the daily deals field, but the company stopped that practice last year when the space began to thin out. Groupon currently holds 50% to 55% of the industry's market share, followed by LivingSocial with 20% to 25%, according to Yipit data. It remains to be seen whether Mason can turn it all around and keep his job, but the success of Groupon and LivingSocial are critical to the deals field. it would be weird for the board not to be asking that question," Mason said at a conference on Wednesday. The stock slump led to rumors this week that Groupon's board is itching to oust company founder and CEO Andrew Mason, who did little to dispel the reports. It was a plunge Groupon's stock could ill afford, bringing it well under $3 - a shocking 89% below its IPO price just one year prior. Groupon ( GRPN) shares lost nearly a third of their value earlier this month, after the company reported that its third-quarter revenue growth slowed sharply. Meanwhile, daily deals leader Groupon suffered through its own terrible earnings report. The majority of the layoffs were in the sales, editorial and customer service departments. Amazon lost a whopping $169 million on its $175 million buy-in.īad news hit LivingSocial more directly on Thursday, when the company announced layoffs of 400 employees, or 10% of its global workforce. The season's unhappy tidings began in late October, when Amazon ( AMZN, Fortune 500) reported a worse-than-expected loss due in part to its investment in LivingSocial. "The field is going through some growing pains," says Unaiz Kabani, data product manager at Yipit, a research firm that tracks the daily deals space. A recent string of bad news for the top two companies in the space has only given them more fodder. (Julianne Pepitone CNNMoneyTech It's been a winter of discontent in the daily deals space, with serious issues afoot at kingpins Groupon and LivingSocial.įinancial analysts have long criticized the daily deals field for its low barrier to entry and unproven long-term viability.
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