The daily deal business — long thought to be an unsustainable business model because of the cost to merchants — is officially losing steam: The purchase of Bloomspot by JPMorgan Chase signals the end to daily deal programs as we know them. While daily deal companies developed an elegant, effective mass-marketing technique that attracts consumers and has created brand equity for the likes of Groupon and Living Social, the merchant-funded incentive model, with its relevant consumer offers and laser-focused targeting, wins out over the daily deal shotgun approach of providing random consumer offers. As a result, we will now see the convergence of daily deal marketing with merchant-funded incentive program analytical technologies and economic models.
The transformation has begun. Companies like JPMorgan Chase, with its acquisition of Bloomspot, and MasterCard, with its purchase of Truaxis, will lead the way to a new breed of consumer offers that serves consumers and merchants alike and delivers increased cardholder loyalty and transaction volume to payment card issuers. The next iteration of payment account loyalty programs will — it is hoped — meld loyalty program benefits with actual payment transactions, providing a seamless consumer experience at the point of sale.
