NEW YORK (MainStreet) Consumers are being inundated with hundreds of deals being offered to them daily and wading through them takes time and patience.
Clipless, a new mobile app company based in New York and launched in September, helps consumers save money by sorting through deals from thousands of sources, including Groupon, Living Social, Amazon Local, Foursquare, Gilt City, Yelp and Restaurant.com. The app, which is currently only available to Android users, sends consumers an alert when there is an opportunity nearby to save money.
"Clipless sorts through 2,000 deal sources and aggregates and delivers them to your phone and finds your location as you move around," said Clipless CEO Michael Barnathan. "We can help you discover new deals. It is smarter than the average way where you search for a deal."
The app has been designed to use minimal battery power, so users can leave it running in the background or you can open and exit the app whenever you need it.
Clipless simply uses Google Play's Location Services to find nearby deals for users based on where they are located. Aside from that, the app doesn't track any personal information about users.
The company's app offers consumers a reprieve from sorting through emails or searching online for a deal, he said.
"We can show you deals," Barnathan said. "This is a new take on the daily deal space. People are starting to get fatigued because it requires too much work in advance. Our app pops up deals proactively."
Since its September launch, the app has already garnered 8,500 users and is adding 150-200 users daily, allowing shoppers to save a collective $32,000. Within a year, its users should save over $500,000. An app for iPhone users should be ready by November.
Businesses have been receptive to the app, because they are getting additional traffic, he said.
The exposure and the ability to get their name out to people that are relevant to them is a huge win for businesses, Barnathan said.
"If you are a restaurant and people are outside trying to make a decision, Clipless brings more relevance and brings better quality traffic to the establishment," he said.
In just a month, the Clipless app has experienced a repurchase rate, which is the amount of users who purchase a product and then go on to purchase another, of 38%, compared to a conversion rate across the entire ad industry of 2%, he said. Users who did their own searches on the Clipless app using the map or list view spent an average of five minutes and 56 seconds looking at the list before selecting a deal, suggesting comparison shopping. By contrast, those who clicked through when a notification popped up did so in an average of 44 seconds, meaning that Clipless was able to drive more focused traffic and preserve the "impulsiveness" of the deal experience using context.
Clipless hopes to act more like a personal assistant in the future and make recommendations to shoppers, which will help both customers and merchants, and plans to expand to Europe soon.
Later on, the app will also be integrated with other social media sites and allow its users to opt in to check-ins with businesses and share deals.
The sheer number of daily deal websites are making it difficult for consumers to keep track of all of them and there is a shift towards consolidation due to fatigue, said Heather Dougherty, director of consumer insights research for Experian Marketing Services, a New York data and analytics company.
Visits to the daily deals category declined by 16% in September 2013 as compared to the previous year, she said. However, larger daily deal companies continue to thrive. Groupon, which commanded nearly 55% market share of the category in September increased 18% year-over-year, followed by second-ranked Amazon Local with 19% with a whopping 292% increase as compared to September 2012, Dougherty said. Conversely, visits to third-ranked LivingSocial declined 26% year-over-year.
Most users tend to default to their email when looking at daily deals, and it makes up 30% of all visits, she said. Search follows with nearly 16%, which has increased 61% year-over-year and social networks rank third with 8%.
Daily deal providers have expanded into a wider array of products and services such as charity, automotive and travel and merchants have also begun to broaden the length of time offered to purchase the deal. Mobile also continues to be a platform for growth with daily deal providers, Dougherty said.
Since up to 50% of the purchases are made from a smartphone or tablet and are impulsive, it is important for businesses to make the process relatively simple, said Ilya Mirman, vice president of marketing at Yottaa, a Boston web optimization company.
"The best sites work very hard to streamline and compress the entire sales cycle research, decision, purchase into the fewest number of clicks that can often be achieved in seconds," he said. "Site speed is critical here, because it impacts the engagement and purchase rates. The effect is particularly severe for mobile sites, because users are often less patient."
More companies are seeing the decrease in effectiveness and are taking a different tactic by sending out one-to-one personalized offers, helping them maximize retention and avoid squandering too many deals or inappropriate deals, said Jerry Jao, CEO of Retention Science, a retention marketing company in Santa Monica, Calif.
"Consumers are also increasingly opting out of daily deal emails, because their inboxes are overloaded and the value isn't there," he said. "They're getting too many deals that aren't tailored for them and don't have time to sift through what's relevant. In my opinion, companies need to offer at least a 50% discount - a perception thing - to get more people interested in their deals and to gain traction. Most are now offering discounts in the range of 60-70% to make their deals appear more attractive."
--Written by Ellen Chang for MainStreet