Boom in bargain sites

Snowplanet uses discount websites as part of its marketing campaign. Photo / Glenn Jeffrey

Voucher websites are gearing up for rapid expansion as digital discounting comes of age.

Numerous digital voucher publishers have sprung up, offering various styles of deals via the internet, and accessible by mobile and smartphones.

After launching in 14 regions around the country in just four months, group discount website GrabOne has expanded into Australia.

Modelled on the phenomenally successful United States site Groupon, GrabOne required a certain number of shoppers to sign up to its deals before the discount becomes available.

Founder Shane Bradley said only two deals have failed to achieve the minimum number of buyers since the site launched.

To date it has sold 250,000 coupons, saving its customers $6.8 million, he said.

GrabOne is a joint venture between Bradley and media company APN, owner of the Herald on Sunday.

Groupon, founded by a 29-year-old music graduate in Chicago two years ago, has become the fastest-growing company in web history.

GrabOne focused on things to "eat, see and do", Bradley said. Consumers sign up for daily deals including restaurant discounts, beauty treatments and boat cruises, and once a minimum number has been reached the voucher is triggered.

Social networking is key to the model - GrabOne has 52,000 Facebook friends who encourage their online communities to sign up for a desired deal.

In Australia, GrabOne has joined with radio group ARN, also an APN company, which will sell to participating retailers.

It was important to have an established media partner on board, Bradley said. "People know that we're going to be around for 5, 10, 20 years."

Businesses do not pay up-front and GrabOne earns its income from commission on sales.

In the current economic climate, with firms looking for more custom and consumers wanting a deal, it was a win-win offer, he said. "It's almost the perfect time to launch a business like this."

GrabOne is about to offer an iPhone application and other smartphone apps will follow, allowing customers to store voucher barcodes on their mobiles.

"This is what we're focusing most of our efforts on in the next 18-24 months."

Snowplanet general manager Nick Bradshaw said he was sceptical about voucher sites when the North Auckland snowsports park first tried GrabOne. "Our expectations were reasonably neutral."

But he said it had been a useful mechanism for reaching people it hadn't been able to reach before. The voucher site is now part of its marketing plan.

Frayne Cooke's company, Associated Media, bought the assets of the Vouchermate website out of liquidation earlier this year. The site offers discounts on all kinds of services that consumers can print or get texted to their mobile phones. The concept works but was overpriced and targeting the wrong area, Cooke said.

The former owners had been going after big brands and advertising agencies, when Vouchermate is better suited to small and medium enterprises, he said.

Associated Media has made improvements to the site's self-service tools, and reduced subscriptions from $3000 to $4000 a year down to as little as $5 for three months. It has also improved the local search functions.

"Essentially, all we want to be is the tool provider and the publisher to help them publish where they want to promote."

The former owners had a sales deal with radio and television company Mediaworks but there is no longer a formal arrangement.

"There's ongoing discussions and where that might go we're just not sure yet," Cooke said. He believes there's room in the market for a variety of digital voucher models but is wary of too much fragmentation.

"I probably see some value in companies such as ourselves working with other companies to pull some of these things into one place."

Discount site VoucherMob only publishes its deals on the iPhone but will launch Android and Windows 7 applications in coming months. It offers a different proposition, founder Scott Bradley said. The phone knows where the consumer is and picks up VoucherMob deals from nearby retailers.

It is aimed at impulse buyers already out shopping and looking for a deal.

Only 7 per cent of Kiwi mobile phone users have smartphones, compared with 25 per cent in theUK, so there is plenty of room for growth.

Voucher site operators say building new-generation applications is expensive, but is an investment worth making.

The sites
* Grabone.co.nz
* 1-day.co.nz
* vouchermate.co.nz
* vouchermob.co.nz
* ezycoupons.co.nz