LBS and Mobile Marketing and Business Development

Wilson Kerr

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GAP Daily Deal Demand Crashes Groupon Site

BREAKING NEWS:

Want to check out the potential impact of location-based Personalized Shopping in real-time? Well, for a while today, you had to wait at least a little while longer to review the role group-buying site Groupon will play.

Their site went down and temporary chaos ruled, due to unprecedented consumer demand for today’s unique deal from national retailer GAP. The (ongoing) deal is a limited time offer for a $50 gift card from GAP, for $25. Free money.

This looks to be the first time a national deal of this sort has been offered and the response shows the true power of offering pre-qualified opt-in consumers a tracked campaign that can be tied to incremental (frontside) retail sales lift.

I have written about this trend previously and the space is red-hot.

Groupon Site Crashes Due To National Gap Deal Interest

By signing up for Groupon, consumers ask to be told about deals near them. Since the GAP is a national retailer, they have locations in every city that Groupon has local coverage in.

My local Groupon Boston discussion board was packed with confused customers, dealing with a site trying to process too much revenue too fast. The good, validating news for Groupon and other Personalized Shopping players like Living Social and RueLaLa is that these confused customers were/are all frantically trying to buy the deal.

This is the online/mobile Personalized Shopping equivalent of a frenzied 6 AM rush through the doors on Black Friday.

Here was the official response from Groupon:

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From Moderator “Josh At Groupon” (14 minutes ago):

Everyone experiencing site issues:

Thanks for your patience and sorry for any inconvenience. We’re experiencing an unprecedented level of site traffic today and are monitoring the site all day. If you’re experiencing some technical troubles with the site, I suggest trying to reload the page a few times. If you continue to experience trouble and need to leave the site for a while, just check back before the end of the day and buy your Groupon then! This deal will be available until midnight. Again, very sorry for the trouble.

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In Boston alone (I refreshed a few times and the page loaded without a “Something Broke” error message), at the time of this writing this, 5898 people (and counting, fast) bought the deal (and there is still over 9 hours to go). That’s almost $150,000… at mid-way through the deal, and in one city.

Groupon is in about 75 US markets, so, even if we stopped the deal now, that’s in excess of $11 Million in revenue, sold to about 450,000 people, in a single day.

And, assuming Groupon customers do not melt-down their servers entirely, there is still 9 hours to go. Phew. No wonder they are valued at  over $1 Billion.

Some lessons here are to 1) carefully consider the impact of the fine print on hundreds of thousands of shoppers 2) do not under estimate the enthusiasm of a populace seeking a great deal near them and 3) location-based Personalized Shopping is here to stay and is about to get a whole lot bigger.

Read more about my take on Personalized Shopping here and let me know how I can help your brand take advantage.

-WK

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Wilson Kerr (@WLLK) is a former Tele Atlas exec who started Boston-based Location Based Strategy, LLC in 2007 and is helping his clients harness the power of Personalized Shopping. Contact him today to learn more.



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Wilson has 11+ years experience in the Mobile and Location Based Services (LBS) space. Recently, he became Director Of Business Development and Sales for Unbound Commerce, a Boston-based mobile commerce solution provider. He has deep expertise in the areas of mobile commerce, social media, branded location integration, branded content licensing, and is knowledgeable in a broad range of navigation technologies. Wilson has worked with top tier brands, content providers, device manufacturers, and application developers, including Nokia, Unbound Commerce, Tele Atlas/TomTom, The Travel Channel, Langenscheidt Publishing, Intellistry, Parking In Motion, GPS-POI-US, and others. Wilson is a blogger on all things location-based, edits the LBS topic page on Ulitzer, teaches a Social Media 101 class, and has served as a panelist and speaker at Mobile LBS conferences and networking events. Wilson has held positions in Business Development, Sales/Marketing, and Digital Licensing at The North Face, Outdoor Intelligence, Fishing Hot Spots Maps, Tele Atlas North America/TomTom and, most-recently, Unbound Commerce. Wilson left Tele Atlas to start Location Based Strategy, LLC in 2007. Company Website: http://www.LBStrategy.com. Twitter: @WLLK