Deal of the Day site Fatigue

Here’s what I do now – Around midnight, I check my Groupon app on my iPhone for the latest deal, then move over to WagJag.com to see what they have to offer. In the morning, I move to DealFind, LivingSocial and finally a new site called from Red Flag Deals called DealoftheDay.

I’m sure there is a slew of other sites offering deals upon deals.  And why not? Rumour has it Groupon turned down Google’s $6 billion buy-out offer. Of course, that news would trigger other entrepreneurs and eager businesses to launch their own daily deal sites while envisioning what they would do with a few billion.

But I might be suffering from coupon fatigue. The issue I find is many of these sites are offering the same thing over and over again. How many days of the week are dedicated to specials on botox injections, laser hair removal, photograph enlargements and 3-month gym memberships? A lot.

I recently used a Groupon for a local salon and asked the owner why she went with a deal-of-the-day site. She said her main goal was to attract new clientele to the salon, but when pressed if she’s experiencing a surge of new business from the promotion, she said it’s 90% current clients who discovered the deal so far.  When Gap famously offered $25 for $50 worth of merch in August, some analysts claimed the retailer may have made $6 to $11 million, but since it’s a half price coupon, that it essentially also lost $6 to $11 million (a kind of glass-half-empty response). A recent Rice University study indicates 66% of Groupon promotions were profitable, but more than 40% of businesses wouldn’t use it again.

Many social couponing sites have a few kinks to work out before appealing to the Googles and the Facebooks. Some deal of the day sites didn’t update their deals over the December holidays (there’s too much competition to not be a daily offer in this business). Other sites have angered potential customers by offering cheap iPads that were never actually in stock for the masses. Recently, WagJag CEO, when responding in an interview to complaints from customers about poor customer service, narrowed it down to a small handful of users who didn’t know to check their junkmail. Groupon has its share of complaints as well – similarly with communication issues.

Rumour has it Four Square will be looking to partner with Groupon this year – which makes sense – check-in, get a coupon. More partnerships should happen this year as well – maybe not from Google, but maybe large-scale retailers. Think about it – Last week, Sears and Kmart in the States announced plans to launch an online Netflix competitor -which boggles my mind as it would seem the retailer went after the wrong competition – merging coupon sites with large retailers seems like a no-brainer.

Have we reached the max on coupon sites, or will there be a crash soon? How many vials of Botox must each city buy to keep these sites alive?