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Confessions of a serial Grouponer

I’m not gonna lie. The first thing I do when I wake up in the morning is roll over, unlock my iPhone and refresh the Groupon and LivingSocial home pages.

Some might say it’s obsessive. I call it exhibiting character traits of the proactively frugal.

This past month, I’ve had a massage, pedicure, frozen yogurt, sushi, tapas and sangria, a three-course meal with wine pairing, eggs benedict and a night at the theatre to experience Wicked.

I’m not alone in my frugality.

Retail sales at these daily deal or one-day sale websites have exploded in New Zealand in recent years. Since the start of 2010 these sites have seen an eight-fold increase in sales, according to the most recent BNZ Online Retail Sales index, which analyses customer transactions.

These daily deal sites lower cost thresholds and afford us the opportunity to try new experiences, restaurants or vendors. For businesses, they temporarily lower their margins to expose the business to a new customer base.

In rare cases I’ve even been known to leave my central city bubble for a suburban restaurant. If that’s not a cultural experience, I don’t know what is.

However, I have learned not to run my expectations too high. These vendors are trying to give a boost to their customer base for whatever reason. Perhaps the business is new, the market is saturated or, unfortunately, the business has a hard time earning back repeat customers.

Last weekend, my partner and I were looking forward to a blissful morning featuring eggs benedict just a short walk from our cage-sized high-rise apartment. I purchased the voucher for two breakfasts from a daily deal site a couple of weeks ago. It was our first morning where neither of us worked and we looked forward to the rare treat of eating breakfast together.

The café was empty except for one customer at the cash register. The café worker finished the transaction, smiled at me, then turned around and began to wrap pastries on the counter behind him.

There I was, standing at the register, ready to order, with the guy’s back turned to me. I gave my best pay-attention-to-me cough: eh-hem!

“Hello, may we order please?” I asked, extremely politely as I recall.

“I have no chef today,” he replied.

“I’m sorry, no chef? But I was really looking forward to eggs benedict. …”

He interrupted me.

“I have no chef today,” he restated a little louder.

Turns out, I broke one of my cardinal rules of daily deal vouchers. I didn’t read the fine print (see rules below). The voucher is only good 6:30am–3 pm on weekdays.

(By the way, I obviously wouldn’t have purchased it had I read the fine print. The carbohydrate-to-fat ratio of eggs benedict is clearly for weekend consumption.)

That was a case of trying a new vendor and, in this case, not returning to said vendor. In other cases, daily deal sites also afford us the opportunity to go out and try new things, or at least stop giving excuses the cost is too high.

Take, for example, my fear of the ocean and large fish. I won’t bore you with the history of my thalassophobia but it began when I saw the movie Jaws at age 6 and continued into my 20s when my ex-husband pushed me into tropical Belizean waters to swim with 9-foot nurse sharks.

Anyway, thanks to a recent daily deal, I’m now signed up for scuba lessons between Christmas and New Year’s. For years, I justified staying out of the ocean, citing high costs coupled with my meagre journalist’s salary. Thanks LivingSocial, thanks a bunch. I’m out of excuses.

Just as any market, when consumers begin to embrace a product, service or idea, the market becomes increasingly flooded. It’s happened from sushi to coffee shops around the globe.

Now, the daily deal market is showing signs of saturation.

According to the BNZ index, the daily sales sector seems to be plateauing and has even seen its sales slipping the past couple of months.

Guy Howard-Willis, director of 1-day and co-owner of Torpedo 7, says daily deal sites need to consolidate, evolve or die.

“Some of the smaller start-ups that emerged when the voucher market took off have a common value proposition. They need to evolve and differentiate themselves from the likes of GrabOne,” he says in the latest BNZ index report.

The market can only support so many daily deal sites, and there’s a limit to how much small businesses can trim their margins to lure new customers. It’ll be interesting to see how it shakes out.

Meanwhile, I’ll continue to roll out of bed and peruse the choices of my next adventure: paddle board lessons, jujitsu classes, beer tasting?

Stephanie’s daily deal commandments

I used to have stricter rules for making purchases from daily deal sites, similar to my rules for diet and exercise. Use moderation, don’t intake more than you expend, and throw all rules out the window on the weekend.

But since moving to New Zealand earlier this year, I’ve found the discounts offered by the daily deal sites actually make products, services and experiences a reasonable price. I've relaxed some rules, or make exceptions when I would have made the purchase anyway, such is the case in yoga classes and wine. 

I do keep some rules, however, that I will now preach.

1. Thou shall not purchase more than one voucher from an untested vendor. Sure, $10 for all-you-can-eat sushi sounds like something out a futuristic utopian novel. Always check reviews for the restaurant or vendor first and, if there are no reports of food poisoning, then purchase one voucher. If it’s good food and redeeming the voucher is hassle-free, only should this vendor see another purchase, voucher or not.

2. Thou shall not hoard vouchers. One consumer protection not afforded to New Zealanders is that of the expiry date. In my homeland of California, vendors are not allowed to put an expiry date on gift cards, gift certificates and daily deal vouchers. It makes sense: If you pay for goods and services in advance, why does the vendor, not the customer, get a say when it’s used by? Therefore, I never have more than five daily deal vouchers or unused purchases at once.

3. Thou shall read the fine print. Look at most of the deals today. They must be used by February and have blackout dates over the holidays. I’m sorry restaurant-out-in-the-suburbs but I’m really busy on Tuesdays between 2 pm and 5 pm when your voucher is available for use. Another pitfall in the fine print: some deals are only available to first-time customers.

sflores@nbr.co.nz

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