Starbucks is the latest respective industry giant to make available a discount coupon for their customers through a daily deal operator as they rolled out their first-ever such discount this week. The one-day discount, presented through Google Offers, makes $10 gift cards available for $5 and the coffee retailer expects to sell upwards of 1 million gift cards during the promotion. This action from Starbucks follows suit with the industry trend in daily deal offers. Retailers of all sizes and from all sectors and are utilizing the offers. Traditionally, smaller businesses get the greatest relative boost with such offers (given they can deliver on the demand for their product which has caused significant problems for some).
Now, larger retailers are using the daily deal platform to gain exposure and bring in an immediate yet potentially short-lived jump in business. Just a few weeks ago, Amazon launched a similar offer through their AmazonLocal platform that too made a $10 gift card available to customers for$5. With the push from larger retailers to extend offers, as evidenced by Starbucks and others, it tells us that daily deal operators can benefit all businesses in the retail realm when the retailers do the offers correctly.
In others words, there is a right way and a wrong way. The right way brings buzz to smaller retailers and increases their exposure and simply drives more business for larger retailers. The wrong way can bury a small local retailer who operates at a loss when they are unprepared for the business they receive, whereas it is simple loss that a larger retailer can recover from. As such, the essential consideration for a business interested in providing an online offer is to know accurately what they can handle in terms of new business and plan their offer accordingly.
How Businesses Implement the Offer
As such, businesses need to make an appropriate offer relative to the size of their business and appropriate to the scale of their operations. This consideration is most important for smaller, local retailers. All offers are not created equal and businesses need to choose the right ones for them. If a company has the resources up to a point to field the surge in business that an offer for ½ priced cupcakes, for example, would bring, then the number of accepted offers should be capped. Buzz surrounding the company is only increased with the time constraint on the offers availability, but they don't risk promising orders that they simply can't fill without running into the red. Simply put, the offers provide potential for great return, but when done correctly.
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