Technology

When the buzz around daily deal sites ended, some companies folded, but others have flourished.

When the buzz around daily deal sites ended, some companies folded, but some flourished.

Five years ago, my morning ritual involved turning on my smartphone and scanning daily deal websites. I’d bounce between Treat Me, GrabOne and Groupon to see who had the best deals on restaurant meals or weekend getaway packages. Many of us were doing it, browsing for digital coupons.

There was always a time limit on these sites. You had to buy now or risk missing out.

Then, abruptly, the buzz around daily deals and group-buying sites ended. The bubble burst and a number of players shut down. Analysts suggest it was because the businesses featuring their cut-price products and services on these sites realised the deals didn’t encourage customer loyalty.

I always felt like a half-priced diner going out on a Treat Me coupon, because often I was treated like one. The restaurants were usually just trying to fill seats on slow nights. It was, more often than not, a patchy experience.

The daily deal sites are still there, but the scene has changed. GrabOne, the best known, has tried to reinvent itself as an online marketplace, more akin to Trade Me, but has struggled. Its owner, New Zealand Herald publisher NZME, noted in its financial statements recently that GrabOne’s revenues remained “under pressure” as it moved away from being a daily deal site.

Trade Me sold Treat Me in 2013 after dabbling in daily deals for a couple of years. Big US players Groupon and Social Living had a crack at the local market too, with little success. Groupon acquired Social Living’s remains last year, paying zero dollars for it – the ultimate cut-price deal.

But some daily deal survivors are quietly doing very well. Waik a tobased 1-day.co.nz was among the first of the daily deal sites to launch in 2007. Its timing was perfect, with economic recession looming.

It has just sold its 10 millionth product. One of its bestselling items is a steam mop.

Electronics and clothes are its two biggest product categories, although managing director Greg Bell says furniture is a fast-growing category. 1-day.co.nz had a foray into the experience-based deals that GrabOne and Treat Me specialise in but quickly retreated as the owners realised they had little control over the quality of experiences on offer.

They refocused on physical products that they could touch and test themselves. 1-day began by featuring three products a day, starting the clock at noon and giving website visitors 24 hours to buy before the deal expired.

“You couldn’t get away with that now,” says Bell. “We feature 300 products every day. We are a shop that changes our shelves every day.”

“We feature 300 products every day. We are a shop that changes our shelves every day.”

The daily deal sites that have survived are now squarely competing with Trade Me, the biggest online retailer of them all, as well as Amazon, eBay and Chinese marketplace Alibaba. These sites have millions of products on offer, sharp deals and, in many cases, an advantage over local e-tailers, as buyers importing goods into New Zealand don’t have to pay GST if the value of the product is less than $400.

It’s a recipe that has worked for a decade – 1-day sold $54 million of goods last year and employs more than 100 people. Bell has faith in his buyers, who are scouring the world for products and constantly haggling with suppliers to get the best deal.

Bell thinks 1-day is well placed, even as Amazon prepares to enter Australia, complete with massive warehouses for its inventory. “We can ship our products faster, we are local, with live chat and customer service,” he says. “We have a few advantages that will hopefully give us that edge in future.”