Priceline Enters Daily Deals Melee
Test launched in New York; national rollout expected.
While some consumers may need another daily deals email in their inbox like they need a hole in the head, Priceline is taking its shot. The 13-year-old travel brand last week began sending a “tiny” list of New Yorkers offers from local merchants, said Brian Ek, spokesperson.
“By nature, our customer base comes to Priceline because they are looking for the lowest price, they are looking for deals and bargains,” he told ClickZ News. “So we think there might be a natural fit, and we’re going to find out.”
Ek said Priceline is using the white label deals provider Group Commerce, which is handling the ad sales with New York merchants. On Friday, the offers came from Monster Pizzas ($20-for-$10 voucher) in Greenwich Village, Green Apple Dry Cleaners ($40-for-$15), and lessons from Manhattan Kayak ($160-for-$80).
Priceline isn’t asking New York recipients if they want to receive local merchant deals, even though most likely signed up for offers from airlines, car rentals, and hotels. Simms Jenkins, CEO of Brightwave Marketing and a ClickZ email marketing columnist, questioned the strategy of transferring permission from a list built on one style of offer to a different kind.
“It’s not a surprising situation,” Jenkins said. “Senior management often see email as a cash-generating machine without regard for best practices or how it relates to a brand…It’s lazy email marketing, but it will still work.”
Although New York is currently the sole market available, a dropdown menu on the site uses “Coming Soon” copy suggesting Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami, Philadelphia, San Francisco, Seattle, and Washington D.C. will soon be in the mix.
It’s certainly not the first time Priceline has attempted to break out of the travel category with plays in other niches. For instance, 11 years ago, the company made an ill-fated attempt at allowing consumers to bid on gasoline prices.
Priceline’s daily deals move comes one month after competitor Expedia.com partnered with Groupon to offer the latter’s email audience travel and hospitality discounts. Orbitz also reportedly plans to soon enter the ever-crowding deals space with a product of its own.
According to a March report by BIA/Kelsey, the daily deals niche will be a $4 billion industry by 2015. In 2010, BIA/Kelsey found daily deals services captured $873 million. If correct, its projections indicate a 35 percent compound growth rate during the next four years.
Groupon and LivingSocial are the clear leaders in a space involving at least 200 deals-based brands. But notable tech names like Facebook, Google, Foursquare, and Scvngr loom as possible contenders. And new deals sites for specific demographics like moms, hunters, and golfers seem to be popping up constantly, and it’s safe to wonder how much fragmentation can occur before the niche’s bubble bursts.
A partial list of current services demonstrates how much the category has exploded:
Mom Deals
Golf Deals
Baby Deals
Jewelry Deals
–Bfiz
Women’s Clothing And Accessories Deals
Hunting Deals
