I was delighted the other week when Spotify finally launched in Ireland and immediately signed up to see what all the fuss was about. I buy a lot of music and have never been a big fan of streaming, always preferring to buy a CD or download but after having used Spotify pretty much non-stop for a couple of weeks, I admit I’m warming to the idea of streaming. Although I found myself using Spotify a huge amount, when it came to buying the music I was listening to, I went back to iTunes to make the purchase. Even though I discovered (and sampled) the ‘product’ through Spotify, I went back to the old reliable to actually part with my cash.
This hit home how big an advantage it is for a company to have an established footing in the online world. iTunes already have a huge user base in Ireland and have turned themselves into a frequent use product and this gives them a significant edge in the music space. When it comes to making purchases online or on mobile, people are lazy and don’t want to continuously set up new accounts. This is true for many aspects of the online world.
I think the convenience of using a service online that you’re already familiar with is a particularly big barrier to any new service on the net and, as Dave McClure points out, the key to success in payment systems is with frequent-use products. With companies like Apple, Google, Facebook, etc. quickly becoming the go-to-guys of the web, they are in a powerful position when it comes to leveraging their users into customers whether that be online or offline via mobile.
New ads doing the rounds by a united media owners group including RTÉ, TV3, Sky and Associated Newspapers aim to convince business owners of the importance of advertising claiming that sales of companies who advertise aggressively in a recession rise over 256% over those that don’t.
Many businesses have cut down on advertising spend during the recession but advertisinggrowsbusiness.ie highlights the role that advertising can play in strengthening a brand and growing a business. With slogan’s like “My favourite beer is definitely watya callit” the campaign promotes the idea that successful companies are the ones that invest in their brands and if you want to set yourself apart from your competitors, you can’t ignore advertising.
So it looks like it’s time for a shake up in the world of daily deal sites like Groupon and Living Social and the countless other smaller local rip-offs around the world. It seems as though being required to offer massive discounts and then giving a huge cut of the sales to these deal sites is not something that merchants are willing to continue to do on a regular basis.
Retailers are apparently seeing little benefit from using these sites which is unsurprising as the notion of creating loyal customers for your business by offering discounts of up to 70% has always seemed a bit far-fetched to me anyway. These customers are clearly only there for one reason: a massive deal and it’s unsustainable for retailers to offer such large discounts on a regular basis when they are seeing little repeat business from customers who are just there to pick up a bargain.
Groupon invested heavily in sales teams to market to small businesses and in the end, this has proven to be an unsustainable way of scaling up. But at the end of the day, it comes down to whether the customers (i.e. merchants) found any long-term value in this method of promotion and it looks as though they are voting with their feet and not continuing to use this platform.
Customers can connect their smartphone to the store window display and take control of a virtual shopping bag even purchasing goods on their phones when the store is closed. It’s highly measurable not to mention all that lovely brand awareness that it generates.
I’m a Digital Strategist passionate about the intersection between technology and creative marketing. I recently moved to London after 11 years living in Dubai.