All along, skeptics said that the enormous success of daily deals couldn’t be sustained in the long run. And indeed, in recent months, the industry appears to have suffered some setbacks. Roughly one-third of all deal sites disappeared last year, because they were either purchased or closed down. This week, Groupon shares dropped 15% after news broke that it lost $42.7 million in the fourth quarter of 2011. But some parts of the daily deal industry may have brighter futures than others.
A major reason that so many deal sites have gone out of business is that they simply can’t compete with the industry heavyweights—namely, Groupon and LivingSocial. There’s an argument to be made that niche deal sites, which target consumers in smaller demographics, have an advantage over the sites competing with Groupon for the broadest audience possible.
Jim Moran, co-founder and president of the deal aggregation and research site Yipit, says that niche deal sites are likely to fare better than average in the marketplace. Niche sites “are more appealing to specific demos, so they can have a leg up on the field overall,” says Moran. It’s essentially pointless to offer a deal on bikini waxes or dental whitening to a guy who is interested in deals at burger joints and breweries. Businesses are far more inclined to work with sites with audiences that are likely to buy their products and services. Acquiring users is also cheaper for niche deal sites—because it’s easier to fine-tune a search when the targeted demographic is small.
On the other hand, Moran says, “a broad-based site competing head on with Groupon will have the most trouble.” That’s because it’s basically trying to do the same exact thing as Groupon, only better. And Groupon has a pretty big headstart.
(MORE: How Coupons Became Cool)
Tons of niche deal sites focus on food and fashion, and even more simply base deals on a specific location, be it Austin, Baltimore, or Tucson. Here’s list of some of the other deal sites, which doesn’t pretend to be comprehensive, that target even more specific demographics. Following each site, in parenthesis, is a sampling of the deals you can expect.
BookPerk (discounts on novels, kids books, celebrity bios)
Barking Deals (pet toys, doggie dental spray)
GroupDudes (cars, bars, tech, food, all based in Toronto)
ManDeals (whitewater rafting guide training, deals at breweries and burger restaurants)
Urban Daddy Perks (luxury camping trips in Montana, private photo shoots “for her”)
TroopSwap (deals for vets, active service members, and their families, with 10% of profits going to the Wounded Warrior Project
8moms (mom and daughter matching shoes, Melissa and Doug toys)
CertifiKid (yoga classes, kids karate lessons, baby safety gear, based in D.C. area)
Mamapedia (photo cards, daily planners, “luxury slipper socks”)
Cinderella Wine (flash sales from wine guru Gary Vaynerchuk)
Lot 18 (special offers of about 40% off retail on certain wines)
TheWineSpies (one deal daily on a featured wine)
WinesTilSoldOut (often more than 50% off retail)