Groupon and Scvngr’s moves last week demonstrated how daily deals and geo-social are on a collision course. The deals giant added a location-based “Groupon Now” feature to its mobile app, while Scvngr signed its first brand partner in Levi’s for its “LevelUp” deals platform. Facebook, on the other hand, with its siloed Deals and Places/Check-in Deals platforms, seems stuck way back in, oh, February.
Indeed, the landscape has changed considerably in little more than two months.
Here’s why Facebook might be a step behind other marketing options for deals and geo-social. Brands and merchants can run Check-in Deals via Places – but those offers will not simultaneously appear on the Deals platform. And Deals, not to be confused with Check-in Deals, do not get distributed on Facebook’s mobile app. So, Deals are not served up when users look for establishments to check in to via Places. By contrast, merchants running specials on Groupon and LivingSocial automatically get mobile distribution via those companies’ apps.
Palo Alto, CA-based Facebook declined comment for this story. But the social media giant appears focused on developing Deals and Places/Check-in Deals separately.
At the same time, Andrew Solmsenn, managing director at agency Possible Worldwide and a ClickZ mobile apps columnist, doesn’t expect the separation to last long. “The only possible reason Facebook Deals, Places, and Check-ins are not linked into one service is because Facebook hasn’t figured out how to blend them while providing a satisfactory user experience,” he said. “But they will.”
Daily Deals Players Up Their Mobile Games
As Facebook refines its deals and geo-social marketing products, the biggest daily deals players have been busy becoming more mobile.
LivingSocial beat Groupon to the punch by releasing a location-based feature called “Instant Deals” in March. The feature allows restaurants and bars to run time-sensitive deals; so a café looking to drive lunch-hour foot traffic can run a special from 11 a.m. to 1 p.m., if it wishes. Launched so far as a pilot in LivingSocial’s home base of Washington D.C., it also geo-targets offers to within a half-mile of a user’s location. In terms of the basics, GrouponNow works much the same.
When asked about the similarities, LivingSocial spokesperson Maire Griffin quipped, “Well, imitation is supposed to be the best form of flattery, isn’t it?”
Both companies’ offerings streamline the purchase process for users. As it pertains to GrouponNow, existing Groupon accounts can be used to buy a deal with one click before presenting the barcode or discount to the merchant. Julie Mossler, spokesperson for the Chicago-based daily deals player, said the service – available for iPhone and Android – will roll out in other cities “in the coming months.”
On the melding of daily deals and location-based check-ins, Solmsenn from Possible Worldwide said, “The two are certainly going to converge, but Groupon and LivingSocial are far better positioned to move into the geo-social space than [geo-social brands] are to move into the daily deals arena because the deal agents have provided consumers with a far greater value exchange.”
Greg Brown, chief revenue officer at Extole, had this to say about the colliding marketplaces and Facebook’s likely impact: “Being a first mover as Groupon was for daily deals – or as Foursquare was for check-ins – is becoming less important as the power of the social graph grows. Facebook’s launch of deals, then, while not totally integrated with check-ins, allows them to immediately tap into the social context of its users for deals and buys them time to assess whether a more complete integration of the two is necessary.”
Levi’s Tests Scvngr’s New Deals Platform
While Foursquare is geo-social’s “it” brand, mostly due to it 8 million users, the New York company’s specials platform doesn’t mirror the daily deals model. For that reason, competitor Scvngr’s two-month-old LevelUp initiative bears watching.
Last week, Levi’s became the first national brand to test the platform. Until Aug. 31, consumers who check in on Scvngr at designated retail outlet in San Francisco, Boston, and Philadelphia can earn three “levels” of rewards. The first check-in will earn them $20 worth of credit if they spend $10. The second visit/check-in achieves $30 for spending $10 at a store, while the third gets them $50 for buying an item of $10 or more value.
Boston-based Scvngr struck an intriguing partnership with American Express to make redeeming the Levi’s deals easier for consumers. The credit firm’s members who buy the deals only need to use their cards while making a purchase to get the discount. In other words, it’s not necessary to show the Levi’s store clerk a paper voucher, barcode, or message on a mobile screen.
Levi’s has also tested Facebook Places, Gowalla, Shopkick, and Checkpoints in the geo-social realm. Megan O’Connor, director of digital and social media at Levi’s, explained what her San Francisco-based brand hopes to achieve with Scvngr’s LevelUp.
“We like the loyalty layer that [it] provides,” she told ClickZ. “It is not enough to bring a consumer in the door once; we need to make sure that they come back and love the brand.”
On the local level, LevelUp is being pitched to SMBs in the pilot markets of Boston and Philadelphia. The Amex partnership is so far exclusive to Levi’s campaign. Therefore, local merchant offers can be purchased with all major credit cards by consumers.
Meanwhile, location-based services like Scvngr continue to grow but have yet to reach critical mass. On Thursday, comScore research revealed that roughly 18 percent of U.S. smartphone users are checking in via geo-social apps. Its “MobiLens” study also found that 16.7 million mobile subscribers checked in during March, representing 7.1 percent of the entire mobile population.
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