Look out Groupon clones, here come the celebrities

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Goodypass, a new ‘flash offers’ startup which will offer members goods at cut down prices, looks to be more than just another Groupon clone. If you think about it, most offers sites are startups with no pre-existing brand or audience. The only thing they have to go on is the attractiveness of their offers.

But Goodypass heralds a new wave. It’s fronted by UK breakfast TV star Kate Garraway and backed by investor Kite Ventures. Edward Shenderovich, a Russian-born internet entrepreneur raised in California, is providing seed capital thorough Kite, which has also backed AlterGeo.ru, a Russian social networking site and SponsorPay.com in the past.

Goodypass wil have two main advantages as I see it: access to celebrities to promote the offers and the ‘brand values’ of each celebrity. And crucially, a pre-existing audience for those celebs who will be almost certain to push the offers out through social media.

For instance, Garraway herself only joined Twitter on 15 June this year but already has over 8,000 followers with no significant push. Her idea is that celebrities get freebies so why shouldn’t the general public. It’s a nice story but it also suits the site’s aim: use celebs to push product but in a socially authentic way. The site will also win brownie points with the public by donating 5% of all profits to the Make-A-Wish Foundation for kids.

We’re told that a full launch will happen in the autumn.

One sector that doesn’t get all this yet is the agents of the celebs who have yet to realise their clients could be doing well out of using their social profiles in this way.

Kate Garraway told TechCrunch on email: “Celebrities should be embracing social media for all the obvious reasons, I’ve now realised that not doing so would be akin to not answering viewer’s letters in days gone by. But the great thing about goodypassis that it gives celebrities who aren’t sure how best to get online the support they need but also offers them a financial incentive to do so. The more active you are the more discounts and deals you can offer.”

In the meantime the site is signing other celebrities as part of its offering.

Groupon has delivered over 7 million deals to people in the USA and Europe and saved them early £200 million and is now valued at $1.35 billion. That was on the basis of no pre-existing audience or brand.

If you ask me, this whole sector of celebrity and social commerce is one to watch…

  • inthewoods

    Celebrities now involved in flash sale/groupon sites? That’s the shark, and we’ve jumped it.

    • pleisahs

      Could be great, but remember, everything where there’s money involve and the netizen has this keen sense of ability to perceive it as a scam. So be wary. Biggest Scams That You Didn’t know.

  • http://fo.unta.in fo.unta.in

    The whole deals thing needs to have a mathematical solution. the google for deals actually.

  • http://www.twitter.com/mpfree MPFree

    This is the what the demon spawn of QVC and Groupon would resemble.

  • http://thecakescraps.com TheCakeScraps

    I think all of these big deal site, like GroupOn, are going to go away rather quickly; perhaps in the next 2 years. The reason is simple, for the most part the deals are an awesome benefit to consumers which means the opposite is true for the businesses.

    Remember that if you get 50% off and GroupOn takes 50% the business is giving away 75% of the money. Unless they have massive margins built in (in which case many will not return and most are deal shoppers and won’t return anyway) a business would have to have an impossibly large incremental response rate for this to make sense.

    I think these sites are a fad that rely on a massive PR machine and an incredible sales force (to make the deals w/ businesses) and businesses will get wise to this pretty quickly.

    • inthewoods

      I think you’re wrong Cake – the sites will be around for a long time, but there will likely be margin contraction due to competition. Right now Groupon takes 50% – perhaps one of their competitors will be willing to take 20%?

    • Mw

      Companies that use Groupon write it off as a marketing expense. Business owners understand that they have to pay $$$ to obtain new customers and as long as that number makes sense to them, they will continue to use these types of services. They know getting the same type of impact without using Groupon would be next to impossible or extremely expensive.

      • http://thecakescraps.com TheCakeScraps

        @Mw and Brennan

        I understand that companies can write it off as a marketing expense, and that they can view it that way, but it really doesn’t make sense.

        The reason is that a ‘marketing expense’ will drive future sales, hopefully at full price. The problem with GroupOn type offers is that the people using them are discount shoppers not people influenced by brand marketing to try a new brand. These shoppers are highly unlikely to lead to future sales. Therefore, it is easy to say “write it off as marketing” (as GroupOn would advise) but it fails to do any actual marketing that would drive profitable sales (the part GroupOn probably doesn’t talk about).

        There is something to the delinquency rate, but I think it would have to be huge to break even. I think the best place for this to work is some sort of membership company because then it is a hassle to cancel it and the business may come out on top.

    • http://buzzraid.com Brennan

      Like others have said and others will say, Groupon is looked at by businesses as advertising instead of a sale mechanism. Instead of placing an advertisement for their business in the local newspaper they will just partner with Groupon so they are almost guaranteed some foot traffic for just about the same price as the advertisement in the paper which really doesn’t add any incentive to visit. The delinquency rate of the deal is also something that many don’t talk about since every unclaimed Groupon is still money for the business and they don’t have to do anything for it.

    • http://www.saylocal.com Adam

      Let’s give Kate some credit here, at least she is attempting to elevate the game beyond “Groupon clone.” We have been working on a different take, but one that also attempts to improve the economics for the small business while maintaining the level of value for consumers. The site, http://www.saylocal.com, promotes locally-owned businesses using a directory of incredibly discounted offers to attract new customers, and a universal loyalty card to track and reward repeat customer purchases. In order to earn additional discounts, consumers have to shop at full price until the reach a spending level set by the business. This new twist on group buying brings loyalty into the equation, removing one of the biggest problems for the small business.

  • http://www.goodypass.com/ Kate Garraway

    I am enjoying reading people’s comments – it’s quite different to what people comment when I’m in a story on Mail Online! From our initial meetings with suppliers they do seem to really value deals like these if they are done in the right way. The key is that the customer gets value and that the retailer gets a happy customer who may return later. Obviously we hope that it will also be good to have a celebrity connection, but only if the deal’s are relevant to that celebrities’ passion, which is our aim…

  • Thomas

    I personally like the aggregation sites like http://DailyDeal.com. Show me all the deals in my city, send me one email, thank you very much.


  • Jake

    Social buying is really hot these days… and why not, its a Win Win game for the merchant, groupon like sites and most importantly users like us.

    With so many different sites offering these great deals, we surely need an aggregator who can wrap them together and put it a comparable format. For that matter, I like how http://www.urbanspoils.com present it. Their UI is really clean & interactive… Overall a real value addition.


  • http://www.wominspiration.com Danielle Uskovic

    The biggest winners here are the consumers. The more sites that compete for our dollar the better, what ever the spin.

  • http://blog.yipit.com/2010/09/friday-roundup-livingsocial-goes-hyper-local-microsoft-goes-down-under/ Friday Roundup: LivingSocial goes Hyper-Local, Microsoft goes Down Under « Yipit Blog

    […] A new UK Daily Deal site hopes that star power can create a unique niche for itself in the industry. [TechCrunch] […]

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