September 2, 2011

Death of the Deals craze!

It all began with the popularity of Foursquare, then came facebook deals, yelp deals, groupon & numerous other such ventures! Most of them are still there & not closing down, yet, but it seems facebook & yelp have gotten over their craze for daily deals! Point worth noting, facebook deals was seen as a group-on killer to the extent that some people suggested facebook will acquire groupon within a year!

This week facebook announced that they are closing down facebook deals & (so did Yelp)! Anyway, facebook had launched deals only as a test project in 8 cities of the USA, so unless you are one of the businesses from those cities who used deals very frequently, this won't affect you, at all. Facebook did say in a statement, "We've learned a lot from our (Deals) test, and we'll continue to evaluate how to best serve local businesses." I really don't know what they mean to say, because that is all they said.

The Important Question is WHY did these giants decide to withdraw from a space that was seen as the next big thing in e-commerce just a few months back?

I have done a some analysis on this & would like to know your thoughts on this big retreat in social media commerce by facebook. (Let's not consider Yelp for this case study, it was anyway not going to beat Groupon or Foursquare anytime soon)

  1. Overcrowded : Mark that word, that is the single biggest reason why most companies, brands no matter who it is, they leave a segment, be it BMW in the 90's or Google of 2009-2011, (yes, I'm referring to Goodle's failed attempts at social media). This market is overcrowded & facebook does not offer anything new the deals market, so it had to go out.
  2. Sales : Google may not require sales teams to make people sign up, it does require sales teams in all the cities it launches deals to make merchants & speciality retailers sign up! & sales teams cost a lot of MONEY! Who'd know that better than me :-/
There must be other reasons too, can you think of something, post it in the comments below!

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