Local shops join forces with coupon websites to sweeten sales
WhitePages.com, an online directory based in Seattle, is launching a website aimed at bargain hunters.
Seattle Times business reporters
WhitePages.com, an online directory based in Seattle, is launching a website aimed at bargain hunters. Called DealPop.com, it joins a bunch of coupon websites that have sprung up since Chicago-based Groupon.com began promoting daily deals at local shops and restaurants more than a year ago.
Starting July 14, the site will sell discount deals on behalf of small, Seattle-area establishments offering everything from cupcakes to clogs for half off. The plan is to expand DealPop to five additional U.S. cities by year's end.
"It's the integration of bricks-and-mortar retail with e-commerce," said Kevin Nakao, chief operating officer at WhitePages. "We've seen large, national brands do that very successfully, but we haven't found a way to do that with local merchants."
DealPop will try to take advantage of online social networking by awarding points to shoppers who persuade friends and family to sign up for deals. The points can then be used to knock down the price of another purchase.
That's a slight variation from Groupon, which says it'll yank a deal if it doesn't get enough takers.
The websites, which also include Seattle-based Tippr.com, a new venture by technology-industry veteran Martin Tobias, typically make their money by keeping a portion of the sales they collect from discount deals. Buyers receive a voucher that can be printed or shown on a mobile phone.
For merchants, the websites are a way to introduce themselves to new customers.
"This puts our name out there," said Michael Hein, co-owner of Yellow Leaf Cupcake, a Belltown cupcakery known for such unusual flavors as "pancakes n' bacon" and "tomato soup."
Yellow Leaf recently offered a half-off coupon for six cupcakes on Yubit.com, a Redmond site created by a Microsoft veteran and two partners. Yubit lets shoppers post short reviews and a "yuWish" list of businesses they think should be featured.
"Every week, we see people from the Eastside coming in because they bought these coupons," Hein said. He now is working with DealPop on a promotion later this month, hoping to capture tourists from other parts of the U.S.
One concern is that coupon websites can work a little too well: Some businesses reportedly have been overwhelmed by coupon-wielding customers, so the sites let businesses cap the number that can be sold.
Hein said he persuaded Yubit to pull Yellow Leaf's promotion after two days to avoid getting bombarded.
"We ended up selling hundreds of coupons, which was what we wanted. Now, with WhitePages, we're ready for anything," he said. "We have the staffing, and we're mentally prepared."
WhitePages, a privately held company incorporated in 2000, was created in 1996 by Alex Algard while he was a student at Stanford University.
It gets more than 20 million visitors a month — mostly people seeking business and residential contact information — and sold about $57 million in advertising last year.
Tobias, formerly CEO of Seattle biodiesel firm Imperium Renewables, launched Tippr in February after buying a portfolio of group-buying patents developed by Mercata in the late 1990s.
Unlike Groupon, Tippr offers "accelerated deals," meaning there's no minimum-purchase requirement.
Instead, the more people who buy in, the bigger the deal becomes. (For example, a $50 coupon for a $100 dinner at a local restaurant could include two free alcoholic drinks if enough people sign up.)
The tactic seems to work best with upscale restaurants, spas and activities, such as stand-up paddle-board lessons and museum tickets, Tobias said.
"It's a little more of an impulse purchase, and something that doesn't fit well into other e-commerce engines," he said.
Dave Morck, 40, of Bothell, said he buys discount deals for local restaurants and attractions at least once a week from several websites.
Occasionally, he said, he tells his Facebook friends about a deal, though he doesn't want to come across as pushy.
"If I was blasting people all the time, I'm sure they'd filter me out or get sick of it, so I don't do it everyday. But if something is really good, I want to pass it on," said Morck, who works for an automotive-fleet management company.
Through social-media and coupon websites, local establishments have found a way to turn customers into marketing agents.
"They can spend less on marketing and pass on deals to us," Morck said. "That's just fine with me."
— Amy MartinezTidbits
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Retail Report appears Fridays. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or email@example.com. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or firstname.lastname@example.org.
About Retail Report
Retail Report is a look at the trends, issues and people who makeup the dynamic and versatile retail sector throughout the Puget Sound region. Every Friday with Melissa Allison and Amy Martinez. Send tips or comments to email@example.com or firstname.lastname@example.org.