More new businesses seek to follow Groupon – is it good for our industry?

Coupon and deal programs, a few of which follow the Groupon business model, seek to serve outdoor, fitness and wintersports businesses and consumers. Could this benefit sales? SNEWS has the insight.
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Since Groupon stormed onto the scene in 2008 offering customers deals on everything from fancy dinners to laser hair removal sessions, other coupon and deal programs have come along.

Now Groupon, and a few of those competitors with similar models, are specifically targeting businesses and consumers in the growing outdoor, ftiness and wintersports industries.

Chad Nason, a spokesperson for Groupon, said the point is to “get people out of the house to experience the community around them.” That includes the great outdoors, he added. The benefit for retailers: new customers.

Nason admitted that though Groupon has done business with a few outdoor retailers in the past, it mostly offers deals for restaurants and other things. So the opportunity arose for several new coupon and deal programs to target the outdoor industry and active people – including PlanetGear, GearTribe, the Clymb and Schwaggle.

Though each program has its own flare, the concept is the same: offer deals to customers that encourage business for manufacturers and retailers alike. The online coupons usually require a certain amount of people purchase the deal before it becomes active. Many sites encourage customers to spread the word, increasing the quantity sold, making the discount worth it to the retailer or manufactuer.

“Really the main benefit for a retailer is to drive new customers to their door,” said Brian Enge, the vice president of strategic projects for the Active Network, which launched Schwaggle in January 2011.

“It’s an incredible marketing tool that hasn’t been seen before,” Nason said. “It really helps businesses gain those new customers they’re looking for.”

It’s a tool, Veronique Markewitz, the founder of PlanetGear said, is “an exciting platform that hasn’t really been brought to the outdoor industry.”

Until now.

New kids on the block

Some of the newbies SNEWS® spoke with said Groupon’s business model and success has opened the door for them to enter.

Bill Lim, the president and founder of the yet-to-be launched GearTribe (www.geartribe.com), said he had the idea for his coupon program to serve the outdoor industry five years ago but when the economy tanked investors were leery, he said. Then came Groupon.

“They unlocked a key that I could use,” Lim said. “Groupon showed that the model could work quite successfully.”

He secured a few investors and got started. He said GearTribe would launch sometime in July 2011. “People can come in and get really good deals relevant to their interest,” Lim said.

Schwaggle (www.schwaggle.active.com) from the Active Network, which launched in January 2011, also offers customers deals relevant to an active lifestyle.

“Our audience is an incredibly broad spectrum of active participants,” Enge said. “These are consumers that are interested in all types of activities and events, which would include outdoor products and events.”

Pieces of flare

Each program has something that makes it a little different from the others.

PlanetGear (www.planetgear.com), which is women-run company founded in April 2011, features mostly fashionable and functional gear and acessories for women, founder Markewitz said. The site showcases professional photographs of products so it’s more like a shopping experience, she added.

“We wanted to bring a site that could cater to women who are outdoorsy,” Markewitz said. The site also donates to the alliance 1% to the Planet.

“The dream is to run a for-profit business that also gives back,” Markewitz said. Lim also has a list of nonprofits he’s hoping to contribute to when his site is up and running.

Unlike the others, The Clymb (www.theclymb.com) works primarily with outdoor and wintersports manufacturers, not retailers, and members have to apply and be put on a waiting list for a small period of time rather than just signing up and purchasing vouchers or products. New members can also be invited by existing members.

The Clymb has attracted more than 100,000 members since it launched in November 2009 and began offering deals on more than 450 brands to members only.

“We have built up this fantastic membership base,” said the Clymb’s owner and co-founder Cec Annett. “I think we’re really matching the vision that we set up from the beginning.”

The Clymb provides an avenue for brands to move clearance items.

“We are here to carve out a new channel for the industry that is a better way of getting goods in front of customers than some of the existing clearance channels,” said Kelly Dachtler, chief communications officer for the Clymb. Dachtler said The Clymb is considering working with retailers in the future.

Schwaggle puts a cap on the number of vouchers it will sell in an effort to not overwhelm the retailer. Schwaggle offers local deals to customers in eight markets and has a goal to reach 17 more by the end of the year.

GearTribe also gives customers the option to access local deals and in addition customers can access deals in places where they vacation. The site will also offer vouchers for restaurants, skiing trips and other things “ancillary to the outdoor industry,” Lim said. “We feel like climbers got to ski and skiers got to eat.”

Caution, deals ahead

While some outdoor industry pundits caution outdoor retailers and manufacturers that regular coupon programs or heavily discounted promotions could lead to customers to simply wait for deals or sales they know will come, others said there’s little to worry about when the programs are used wisely.

Jessica Moschetti, the email marketing manager for Ibex, said the company doesn’t participate in any outside coupon programs but they offer their own promotional coupon codes to loyal customer email subscribers.

“We use them sparingly enough that we’re not training (customers) to look for them,” Moschetti said. “When (customers) get deals it definitely sparks their interest.”

Moschetti said Ibex isn’t involved in any coupon programs because “I’m not sure we really have the inventory to support something that could potentially blow up,” she said, but “We’re definitely keeping our eye on (coupon programs) and seeing how it works.”

Nason of Groupon assured the program doesn’t allow merchants to constantly run deals. He said, “We want to structure it so it is a treat for customers.”

Not only are deal programs a treat for customers, retailers and manufacturers can track how many customers are coming in or buying online.

“Instead of just putting an ad in the local newspaper and you have no idea how many people walk in the door because of it, you only pay when someone decides to purchase the deal,” Enge of Schwaggle said. “It’s a very efficient, risk-free form of marketing.”

--Ana Trujillo

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