Deal or no deal? No deal.

Facebook has announced it will close its experimental service Facebook Deals. Groupon, as of now, remains the undisputed king of group-based buying and daily deals. However, Groupon is also often a clumsy service. It dishes up deals that don’t take into account individual tastes.
Brazilian waxes, teeth whitening and golf lessons aside, the daily deals sector still attracts numerous firms hoping to be the next Groupon. Late last year Facebook decided to get in on the action and announced Facebook Deals. The logic was clear, Facebook could leverage its social power to drive its users into local businesses looking for deals and offers.
Facebook had begun testing its Deals program in April in the US in five major cities: Atlanta, San Diego, Austin, Dallas, and San Francisco. However, after testing for four months Facebook decided, “to end our Deals product”.
In a blog, the company wrote: “We think there is a lot of power in a social approach to driving people into local businesses. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.”
It says it is still committed “to building products to help local businesses connect with people, like Ads, Pages, Sponsored Stories, and Check-in Deals”.
Check-in Deals differs from the Facebook Deals program in that smartphone users can ‘check in’ and receive some sort of discount or deal for literally being there on site with their phone. It is tied in with Facebook Places, Facebook’s answer to Foursquare.

Google wants a slice too
Google, which failed to buy Groupon for a reported $5 billion, is also said to be testing an online coupon program that will be tied in with Google+ – Google offers.
While Facebook Deals is no more, this does not mean that Facebook is no longer interested in the daily deals market and other location based services (LBS)*. With Google showing a clear interest in the sector and with hundreds more digital firms, large and small, still fighting the good fight to get a slice of the action, the battle lines are only still being drawn.
What is clear is that the daily deals market is increasingly becoming an everyday part of peoples’ lives. It is also significantly altering the way people perceive ‘value’. After all, if you can get a meal for two for half price in an Italian restaurant, why would you pay full price in a similar establishment? People now expect deals, they expect retailers to make offers, they expect to haggle on price and get regular bargains.
What Google can bring to the table is its many years of experience working with small businesses and retailers through its Adwords programme. What Facebook can bring is hundreds of millions of people already connected and sharing information, at home and on the go.

Make me an offer I can’t refuse
These are uncertain times for retailers and others in the services industry. However, a quick glimpse at the future, and the growth of the daily deals market, should give anyone selling a service pause to consider doing research into the area.
Mobile commerce (m-commerce) is not simply about having the ability to buy products via mobile devices. M-commerce is being shaped by people having the ability to research and share information on services and deals based on their location and through their social networks.
The secret of success for the likes of Facebook and Google as they enter the fray is not to spam people with random offers but use their significant [digital] intelligence to learn what individuals like and offer them deals they are less likely to refuse.

* WHAT IS LBS?
A location-based service (LBS) is an app for a smartphone. The app knows where the user is and the service is either query-based (i.e. provides the end user with useful information such as “Where is the nearest ATM?”) or they can be push-based and deliver coupons or other marketing information to customers who are in a specific geographical area.
There are many different types of LBS, but the most popular include Foursquare, Facebook Places, SCVNGR, Neer, Gowalla and Yelp for mobile.
Location-based services are quite popular in the US and are expected to bring in $10 billion in revenue by 2016, according to research firm Strategy Analytics. The biggest chunk, just over 50%, will come from location-based search advertising.

Here’s the official video announcing the ill-fated Facebook Deals complete with laconic, hipster voice over by trendy, geekish girl, who’s so like ‘whatever’. Y’know?

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