Article

Aggregator site launches commitment-free coupons program

Services like Xferral offer an easy way to browse deal-a-day sites like Groupon and others.

March 23, 2011 by Kim Williams — Reporter, NetWorld Alliance

Xferral, a personalized daily deals aggregator site, has launched a program that lets users purchase coupons with virtual money and allows merchants to post and manage deals without fees or commission.

Xferral keeps users interested by distributing free virtual money to "try out" deals, which gives users the chance to freely shop for coupons without real financial commitment.

"When users log onto Xferral, they are automatically given $30 in free virtual money to purchase deals that are marked as Mobile Coupon. Users are also awarded $10 in virtual money for every friend that they invite to join Xferral," said Jay Oh, CEO.

Oh said the idea is that businesses will enjoy optimum marketing benefits because deals will be exposed to more users, creating an influx of new customers attracted to the commitment-free coupons.

“If you decide to use the deal, you present the coupon to the merchant, and you are obligated to pay the merchant the discounted price as indicated on the coupon,” said Tina Lee, co-founder and vice president of business development. “Thus, you can ‘try’ the coupon if you wish, but if you don't believe it's worth it, you could easily discard it.”

In addition to the concept of virtual money for daily deals, Xferral also provides a do-it-yourself opportunity for businesses to manage their own deals and distribution without having to pay any fees. Merchants determine the number of coupons to be issued, set the expiration dates, establish frequency and promote multiple deals simultaneously.

Xferral aggregates from other daily deals sites such as Groupon, Living Social, KGB Deals, Home Run, BuyWithMe and more.

If 2008 was the start of the Groupon-like sites revolution, then 2010 reflected the birth of the related aggregator sites. Yipit, Dealery and Yahoo! Deals are some of the major players, and forecasts expect consumer spending on deal-a-day sites to grow 35.1 percent by 2015. For aggregators, this could represent merely the tip of the iceberg.

One-stop bargain shopping

Aggregator sites Yipit, Dealery, DailyDealSites, LocalDealSites and Yahoo! Deals are a just a handful of aggregator sites that launched in 2010.

David Stanley, founder of LocalDealSites.com, which also launched in 2010, thinks the concepts offer deal seekers a more efficient, user-friendly experience, as well as a single source for daily deals.

“If you search any city, you may get a dozen sites that offer daily deals. That means consumers would get a dozen emails a day and have to sift through each one to see the deals. An aggregator site allows consumers to see deals across multiple sites at once,” said Stanley.

Stanley also believes the aggregator sites promote competition within the marketplace because companies aren’t competing based on the number of subscribers but rather on the deal itself.

“Groupon has millions of subscribers and millions of people see their daily deals, but a smaller site may only have a few thousand subscribers,” said Stanley. “However, if they are both on an aggregator site, it becomes a more level playing field because, generally, a consumer is primarily concerned with the deal itself, not which site is offering it.”

Stanley acknowledges that as growth within the deal-a-day market continues to soar, the industry runs the risk of oversaturation, overwhelming consumers. Stanley believes aggregators give shoppers the opportunity to avoid feeling inundated, which will hopefully reduce that risk.

A booming industry

According to media research and consulting firm BIA/Kelsey, U.S. consumer spending on deal-a-day offers is expected to grow from $873 million in 2010 to $3.9 billion in 2015, which represents a 35.1 percent compound annual growth (CAGR).

However, the firm suggests that a number of variables could impact the forecast, such as growth in the number of sites, registered users, transactions per year for the average user and the average price per transaction. Taking these variables into consideration, the deal-a-day market could grow to as much as $6.1 billion by 2015 (47.4 percent CAGR).

“Deal-a-day has experienced incredible growth during its three-year incubation period beginning in 2008,” said Mark Fratrick, vice president of BIA/Kelsey. “We expect this to continue as companies in the space are rapidly adding markets and increasing total user count.”

Fratrick also said that the subdividing in existing markets to provide hyper-local deals to users will help offset consumer fatigue as the novelty of the form begins to fade.

“I think we will see the aggregator sites take on a larger role due to the number of deals being offered across so many sites,” said Stanley. “When done right, an aggregator site definitely provides a better experience for a user looking for multiple deal options.”

As of March 1, 2011, BIA/Kelsey estimates there are 178 cities with deal-a-day sites reaching 102 million people in the United States.