Thursday, October 27, 2011

Understanding the Purposes – and Weaknesses – of Online-to-Offline Discounting

Ben Eddleman, who is an assistant professor at Harvard Business School, writes about the purposes and weaknesses of Online-to-Offline discounting.

"I’ve watched with interest as scores of online marketers have promised to transform local commerce. It’s exciting to bring the efficiencies of online marketing to retail commerce, particularly for sectors like restaurants and leisure where static websites, search ads and banners have proven a poor fit. Initially, services struggled to get consumers interested. “Daily deals” services solved that problem by offering discounts that often exceed 50%, mobilizing millions of consumers spending billions of dollars. Yet this model faces growing resistance, particularly from merchants concerned that “deals” offers are unprofitable. The natural question: When and how are large discounts sustainable?"

Read more here

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