Down economy spawns "deal of the day" websites

June 28, 2010 7:36:59 PM PDT
Looking for a bargain? Who isn't? Thanks to a proliferation of "deal of the day" websites, you can now snag one easier than ever.

"In this economy, every little bit helps," says Homerun.com user Pamela Burdak of San Francisco. "I ended up with $55 worth of food and beverages for, I think in the end it was $15 bucks."

And she hit a home run online, at Homerun.com that is. It is one of a number of "deal of the day" websites that have sprung up in this down economy. They offer different bargains each day.

"Great way to do the things that I would go do anyway and be very generous," says Burdak. "I could take my friends out for drinks -- happy hour -- and look like a big spender, and really it's less than a drink."

San Francisco-based Homerun.com pitches a handful of deals at huge discounts. Users pay in advance for cheap drinks at a local bar, plan a night out on the town for less, or even cut the bill at their favorite restaurant.

"Business is terrific," says Homerun.com CEO Jared Kopf. "I think that the web today is very much about delivering personalized and relevant offers to people and helping people find the things that are actually meaningful to them,"

"Deal of the day" websites have been around for a while.

"Could be retail, could be restaurants, shows, tours, pretty much anything that you can think of dong in your local market that you'd go out and spend some time with family or friends, we promote," says Randy Dean, the Bay Area deal maker of Washington-based Livingsocial.com.

Other deal sites include Restaurant.com, Groupon.com, and Yipit.com. Not only are consumers getting deals, but merchants are benefiting as well.

"They are getting, really, the only thing that they've ever wanted, which is a customer through the door," says Dean.

One of the things that is giving online deals an edge over paper coupons is that they are easy to share. Customers find something they like, then use sites like Facebook to tell their friends.

"And that's really changing the fabric of the way local advertising is done and we feel like we're on the forefront of that," says Dean.

The owners of Bin 38 in San Francisco's Marina District sold certificates online for $24. They were worth $50 when you got to the restaurant.

"People are spending well above the amount that they bought their certificate for," says Bin 38 owner Peter Scully, who notes the buzz generated about the restaurant was worth the price. "It's extremely trackable. We know how many people bought these certificates, how many people came in, what they spent when they came in, did they come back, etc., etc."

Jennifer Pattee saw Homerun.com as a way to get people moving. She is the owner of Basic Training, an outdoor fitness and personal training service.

"The clientele they sent to us has been fantastic," she says. "It's like our ideal client."

Basic Training sold packages of five training sessions for just $34. They were worth $100.

"There were no negatives for us," says Pattee. "We got a lot of new business from it, a lot of people took the promo and then continued with our program and signed up."

Some "deal of the day" users told us they can't stay away; a good deal is just too good to pass up.

"It's pretty addictive, and my friends kind of like it, too," says Burdak.

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Written and produced by Ken Miguel


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