It seems one of the fastest growing type of website on the Internet is a deal/coupon service. The biggest of these so far is Groupon but there is also Living Social, Homerun, and about 1,000 other variations. Heck even one newspaper here in Detroit is doing it.
In case you’re not familiar with Groupon and the like, they are basically websites that offer a super discounted service or product from a business local to the user for a limited time. Groupon is only one day, but other sites like Living Social, AppSumo, Zulily extended their offers for a week or more. For example, today’s deal on Groupon for Ann Arbor, MI is 62% off a round of golf for 2 with cart.
Jumping on the bandwagon of this, probably after Groupon rejected Google’s purchase offer of $6-billion, is Facebook. In April, Facebook revealed Facebook Deals. Now it is running in a few testing markets (all you lucky people in CA) and setup as pretty much a Groupon clone.
Now you might ask, if Groupon is so huge, how is Facebook going to compete? Well I honestly think they’ll hold their own and stand a chance of beating Groupon outright for a couple reasons. The biggest is that they are hitting users where they are. For Groupon, users must either navigate to the site daily or open the daily email from Groupon. With Facebook Deals, the deal is show in the user’s news feed. Before the end of the summer, Facebook will most likely roll over 700 million users worldwide. That is a lot of eyeballs to place on Facebook Deals content verse the 35 million Groupon users reported in January.
The second main reason I think Facebook Deals will beat Groupon is that sharing is automatic and very easy and obvious. For Groupon, there is a small sharing section on each deal. While it is there, it isn’t integral. Plus users will have to connect Groupon to their Facebook profile to enable sharing.
Facebook Deals, on the other hand, has sharing front and center. In addition, depending on the user’s privacy settings, if they purchase a deal, it is automatically shared out to their friends to see.
As mentioned, Facebook Deals is currently only running in a few test areas in California, Texas, and Georgia. But I believe that if/when they roll it out, Groupon is going to have some serious competition for the top “local deal of the day” website.