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Originally published July 1, 2010 at 7:29 PM | Page modified July 1, 2010 at 10:58 PM

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Retail Report

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.

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"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 Martinez

Tidbits

Nordstrom's Bellevue Square store is one of five nationwide where a new makeup line by British fashion house Burberry will soon be sold. U.S. distribution of the Burberry Beauty line initially is limited to Nordstrom stores in Bellevue, Chicago, Costa Mesa, Calif., Paramus, N.J., and San Francisco. The 96-unit line, which includes lipstick for $30 and eyeliner for $27, also will be sold on Nordstrom's website.

The exclusivity agreement between Burberry Beauty and Nordstrom is for six months, said Lionel Uzan, vice president of marketing at Groupe Clarins USA, the line's U.S. distributor. Clarins is talking with Nordstrom about expanding the line to more stores by next spring, he said. The Bellevue store was chosen as a starting point because "it's very affluent, educated and already well-established for Burberry," he said. The debut is Wednesday. — AM

Pioneer Square will host a new outdoor market on Saturdays from July 17 through Sept. 25. Called "The Seattle Square," it will run from 11 a.m. to 5 p.m. and include food from Skillet, Parfait Organic Ice Cream and Ram & Rooster Dumplings; locally designed clothing; midcentury modern furniture; handmade housewares and disc jockeys playing music all afternoon.

The idea for a market emerged after Elliott Bay Book Co. decided to move to Capitol Hill, said Don Blakeney, a Seattle Square co-founder who recently returned from New York City, where he helped organize pop-up stores to rejuvenate empty storefronts in Times Square. "Neighborhoods from West Seattle to Ballard have perfected the farmers market, but few markets bring together the vintage, craft, and mobile food — and set it to music," he said in a new release. — MA

Molly Moon's Handmade Ice Cream, which had lines out the door in Wallingford this week despite the chilly weather, now has a roaming ice-cream truck in addition to two retail stores. The shop is dedicated to locally sourced ingredients, including buying $10,000 worth of Thin Mints this spring from local Girl Scouts to make its Scout Mint flavor. Customers can track the ice-cream truck's location at www.MollyMoonIceCream.com/Truck. — MA

Seattle-based Bartell Drugs has opened a new store in the Midlakes area of Bellevue, marking its 58th location. The store occupies 11,782 square feet of space where a Lamps Plus used to be, at 11919 N.E. Eighth St. Bartell also plans to open a new store in mid-September in the Factoria area, in space formerly occupied by Loehmann's. — AM

After the Los Angeles Times ran a story last week about bacterial infestations in many reusable shopping bags, Bellingham-based Haggen wrote to remind us that the grocery chain, which includes Top Food stores, began selling antibacterial reusable bags this spring. The bags, which cost $1.99, are treated with an antimicrobial product. Researchers quoted in The Times said washing reusable bags works, too. — MA

More than 24 chocolatiers, confectioners, wineries and others will take part in the third annual Seattle Luxury Chocolate Salon on July 11 at Bell Harbor International Conference Center at Pier 66. The salon runs from 11 a.m. to 5 p.m. and costs $20 in advance, $25 at the door. Advance tickets can be bought at www.SeattleChocolateSalon.com. — MA

Retail Report appears Fridays. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com.

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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 mallison@seattletimes.com or amartinez@seattletimes.com.

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