Loren Bendele, CEO of Savings.com, got into the online savings game just before daily deals sites like Groupon became the horse to bet on. He says that the attention these daily deal sites are getting amounts to something more than buzz, but he’s confident there’s a place for his company in a marketplace where all the stalls seem to turn over monthly. His company has 85 employees and is profitable. His site draws close to 5 million visitors a month.
There are daily deal sites for everything, deals for people with celiac disease, deals for your dog (“Pets like babies are HIGH maintenance!” petsimply.com exuberantly informs us), deal sites catering to parents of young children. Daily Deal sites have drawn accolades from politicians, the kind of politicians who have real clout, like former Chicago mayor Richard M. Daley, who stood up at a dinner last February in front of a crowded room to describe Groupon in terms usually reserved for works of artistic genius.
Some have been hinting that if one looks a little more at what is going on with daily deal sites, it may look as though the time is right to jump ship. Groupon’s IPO filing has given some critics the most solid evidence that, for all the hype, these companies may be hollow when one knocks. Twenty-one pages of Groupon’s S-1 filing are devoted to the company’s risks, warning that it may not be able to sustain revenue figures – not good since the company, founded in 2008, has yet to turn a profit.
Bendele knows he isn’t in the daily deal market, and he doesn’t want to be. They’ve made some concessions. “What we’ve done recently though is begin to aggregate all of the daily deal players,” he said. But what if a customer isn’t interested in what the deal sites are offering on a given day? he asks. What if one knows one wants a new television, or a pair of shoes at Nordstroms, and not whatever spa package is being offered on a deal site that day? In that case, Bendele says, a shopper could go to Savings.com. Bendele says that his site does everything it can to vet deals, to have employees and visitors to the site review the site’s offerings.
Bendele admires the daily deal site business model, but he retains a healthy skepticism. “I do think over time the novelty of that may wear off a bit,” Bendele said of the daily deal sites. “You’re starting to hear a lot of reports from merchants that they’re not finding it a useful as they thought it would be.”
Read more on how to break into the daily deals space on Inc.
