Daily deals down but not out

New Zealand daily deal company GrabOne is contesting the conclusions drawn from a 300-person PriceMe survey showing declining interest in daily deals. In a recent survey by comparison shopping site PriceMe just 54% of Kiwi respondents say they regularly use daily deals sites now, compared with 63% in 2011.

“Daily deal sites appear to have fallen from favour this year,” PriceMe concludes.

James Kemp, marketing manager for GrabOne which has around 80% of the New Zealand daily deal market, says the PriceMe survey reflects market consolidation among smaller players over the past few years. “The total industry size has shrunk,” he says. However, GrabOne last year sold 46% more coupons than the year before and lifted membership by 40% to more than one million members. Now 100% owned by APN News & Media, GrabOne hiked its revenue 93% to $14.8 million during the same period.

Kemp attributes the increases to a mix of measures as the Kiwi daily deal market continues to mature since its inception in 2010. “Growth in product sales and the travel sector has been very strong,” he says. “And merchants have worked out how to use platforms such as ours so they’re more confident about putting higher-priced items on there.”

Kemp says GrabOne recently sold $900-a-night hotel packages online.

The PriceMe survey also shows smartphone ownership and use in online transactions has more than doubled in the past two years. PriceMe marketing director Chris Palmer cautions companies that they will increasingly lose business if they have not yet optimised their websites for various mobile devices and screen sizes. “Commerce conducted on mobile devices such as smartphones or tablets has reached a critical mass and retailers need to respond accordingly,” he says.

He adds that online shopping is becoming increasingly social with shoppers sharing their experiences with others, and seeking out ratings and reviews before buying. “Retailers that have been using social media platforms to communicate, share their product or promotional information, and listen to their customers’ needs, have a significant advantage over those retailers who aren’t active in this space.”

PriceMe’s comparison shopping site provides information on over 700,000 products from almost 400 New Zealand retailers.

By Ruth Le Pla. [email protected]