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RetailMeNot launches shopping network

RetailMeNot Goes SocialRetailMeNot, an Australian based coupon site that launched in October of 2006 has just officially announced that they are adding a social network portal to support the main site.

Adding a full blown network is a logical step for RetailMeNot who already largely rely on community to submit and rank coupons. The new functionality allows registered users to make friends, share coupons/deals, showcase profiles, and blog about… that is right, shopping.

Any social network is only good if there is a community to support it, and this is what will eventually be the breaking point. Nevertheless, the site is certainly a leader in such a narrow niche as coupon clipping (currently ranking 2nd) and so I would say the network has a good chance for success.

Here are some interesting traffic and financial stats from the RetailMeNot launch announcement at TechCrunch:

RetailMeNot is pushing through some amazing figures for a bootstrapped (non-funded) startup with three employees. The site averages $4 million a month in sales that are accurately recorded through affiliate channels, with only 40% of codes on the site having a direct benefit for RetailMeNot. Estimated total sales through the site are $10 million a month or approx $100 million a year. 600,000 non-affiliate clickthrus were recorded in February 2007 and 440,000 affiliate clickthrus. The site offers 71,000 coupons from 13,000 merchants and is adding 200-300 new coupons a day, 300-400 new comments per day and 9000 votes per day. Traffic and revenue grew at 20% per month through 2007. King wouldn’t tell me how much the site was making, but told me that it was profitable in seven figures.

As you can see running a popular coupon site can be a very profitable business. It is unfortunate none of that goes back to the users who help build it, and I am not talking about ad revenue profit sharing on user forums. Show us the real money! ;-)

Social price comparison shopping at Hawkee

HawkeeScott Aikin is the heart and soul behind Hawkee, a social portal which is steadily making inroads into the busy price comparison niche. Scott frequently comments on ProBargainHunter and I asked him to tell us more about his online business.

You launched Hawkee in 1997. What was it like to run a website back then?

It was just as exciting as it is today. Technology was impressive for the time and online communities were going strong. Everybody wanted a forum and many successful communities relied on them. Despite the lack of comments, feedback forms were very common and supplied a steady stream of compliments and accolades. It was just as exciting to receive feedback as it is to receive comments today. Internet communities were very new, but remain to this day to be just as cohesive and supportive as they were in the past. You didn’t need to think about monetizing your site because CPM ads paid very well under any niche. In retrospect that was the major flaw that burst the bubble, but times have changed and webmasters have learned from their mistakes. What made a successful website 10 years ago still makes one successful today. The only difference is the technical bar has been raised.

Hawkee has always been a place for developers to share code snippets. Why expand to shopping?

This is part of our plan to become a fully featured technology network. Since we are self sustained we need to work on our bottom line to remain profitable. Shopping directly affects the bottom line and has managed to sustain our company without any outside support. We use this freedom to implement social features requested by our community. Their suggestions and ideas are invaluable to us so we strive to give them exactly what they want. Without a sustainable business model we couldn’t do this. In the future we plan to balance out our offerings with more technology based features that won’t necessarily have anything to do with shopping or scripting.

There are a lot of price comparison websites out there. What makes Hawkee special?

Our price comparison is entirely unique. We establish our own relationships with sellers and do all of the maintenance and price matching on our own. We don’t use any API services like Shopping.com so our results are one of a kind. We’ve also been aggregating reviews from major retailers and offer a very comprehensive database of reviews. Our unique review system allows customers to vote on the reviews they find most helpful and leave comments. Customers can browse reviews by category rather than by product. For example a customer can read reviews on “black Mp3 players” or “32in HDTV LCD” TVs without choosing a specific model. We also have a unique tagging system that automatically tags products based on their technical specs. For example a 17in LCD monitor might have the tags “17in lcd black”. This allows for very specific filtering and digging through our product offerings. Besides these key features we also maintain current coupons and deals to ensure our customers are finding the latest discounts.

Hawkee Screenshot

You officially launched the shopping engine at the end of 2006. What has been the feedback so far? Do people like what they see?

The feedback has been very positive. Customers have no problem finding what they’re looking for and we’re seeing a month by month improvement in our search usage. Our merchant partners love the site and have nothing but praise for it. We’ve become very attractive to many major online retailers and will leverage this in the months to come with more exclusive content.

What were some of the technical challenges as to adding the shopping functionality?

The most difficult challenge is organizing all of this data quickly and efficiently. With every new seller we increase the size of our database and the need for more server resources. When traffic is high during the holiday seasons we need to ensure that we can produce results quickly without any lag. Keeping the site snappy has been a focus since the beginning. Another challenge is organizing all of this data well enough that customers can browse, search and find exactly what they’re looking for. The data we receive from our sellers is not very cohesive and it’s up to us to bring it all together in a way that people can understand.

It is people who make social websites work and looking at product comments there doesn’t seem to be a lot of participation. What makes you believe Hawkee will succeed?

We will succeed because we’ve got the relationships and community to make this work. We’ve got partnerships with many major brand names and we’ve got a thriving community that’s growing monthly. As they become more aware of our newer offerings they’ll begin to adopt and utilize them more. And most importantly we’ve got the technical know-how to evolve and build a product that’s truly spectacular.

Do you run the website for living or is it a hobby? If you have another job, what is it?

Hawkee is a full time business. This website is our primary property, but we’ve also got a handful of smaller sites as well as some upcoming projects.

What are you like outside of Hawkee? Please share some fact from your personal life.

I’m a very laid back individual. I enjoy my peace and quiet most of the time, but I love to travel and socialize. You might catch me at events like the Linkshare Summit or Affiliate Summit. I’m a gamer at heart and put a lot of time into my Wii while I’m not working. I enjoy camping and visit the mountains several times a year to get away from my computer. Sometimes I tend to overwork myself, so if you catch me sending emails late at night please remind me to take a breather.

If you were to give just one money saving advice to ProBargainHunter reader, what would it be?

Definitely shop around. Don’t just check just one price comparison site, check them all. Find the lowest price between them and always double check the sellers for fraud reports. Keep an eye on the current promotions and check sites like SlickDeals and FatWallet. Don’t forget your local stores. Sometimes you can avoid high shipping charges by purchasing at a lower price online and picking up your purchase in the store. Keep a close eye on free shipping offers and always check for rebates and special offers. For example you can sometimes get a free notebook case when you buy a new notebook computer. And lastly always compare online and offline prices.

Why Modoshi will beat DealsPlus

Over the past 2 years I have seen many social bargain hunting sites launch. Most of them had very distinct features and quality design. Yet their flawed marketing strategy made their life very short. If I were to list a few you would most likely have to admit that you never heard the names.

The new kids on the block have been more fortunate in the sense that they started when Digg was already popular and many Internet users have adopted the idea so well that they were not shy digging things anymore. However if you look closely at these websites you will notice that they all suffer from the same problem: they have not built an active community — a community of users who would find and digg up the deals — the kind of community that only FatWallet and SlickDeals currently have.

This is not surprising at all. Bargain hunting is a very narrow niche. It took Digg over a year to become as popular as it is. It will take even longer for these sites if they follow the Digg model.

Social bargain hunting is plagued

We all know that Digg is not community driven in the sense that less than 1% of users control most of the front page news. This is partially due to the algorithms Digg has put in place to favor the top submitters but mostly due to the fact that only a small percentage of users is capable of devoting themselves to the long hours of sifting through the news looking for that Digg-worthy scandal story.

It is obvious that all of the bargain hunting sites currently don’t have even a fraction of the half a million Digg users. I will bet my car that the owners of these sites keep them on life support by searching and submitting deals daily and maybe even by manipulating the ratings to bring the most promising offers to the top for better visibility (for that same reason these websites usually don’t show who voted for the deals. Some don’t even show who submits the deals, at least not on the front page).

The conclusion — social element is there mostly to satisfy your feeling of freedom, to feed your desire to be in control, to create an illusion that you can make a difference. At this time the social part doesn’t do a good job of building a supply of fresh quality submissions for these websites.

How can this be fixed? What can be changed to make the system work? What will compensate for the lack of active users?

It sounds like Modoshi has the solution.

Who are the folks that submit news to Digg? They are mostly teens — school children and college students. They have a very strong feeling of community, they have the time and curiosity to try new things, they are willing to do it for free or for a very small pay. Modoshi is a community where users who submit or pick the best deals are financially compensated. Right now each user only has one shot a day at winning the two daily prizes — $5 for submitting a new deal and $5 for digging an existing one — however as the site growth the prizes will grow as well, according to Modoshi co-founder Vaishali Anga. $10 a day doesn’t sound a lot at all however keep in mind that Netscape was able to sway the top Digg users with a mere $1000 a month — and working for Netscape sounds like a full time job to me.

Modoshi Contest

This is not all however. With each new deal the submitter has to verify 3 existing deals for accuracy. This just sounds like a terrific idea! Once the bugs are worked out the only thing that Vaishali will have to worry about is that his servers are capable to support the crowds of teens who will flock to play the game and earn that penny towards next Wii. By the way, about Wii, the top Modoshi user in January will get one for free — it is another contest the team is running and the prize selection only proves my guess at what the target age is. Seriously though enforcing verification should hugely improve the overall deals quality and as the result will make the site more attractive to those who come to use those deals.

Different game requires different rules

According to Vaishali when Modoshi launched in November it “started on the premise that it was high time contributors to the Internet community in general (who) got a share of the revenue”. The team quickly abandoned the concept though. “Pricier items such as TV etc got unfair advantage. Deal (submission) was based primarily on commissions, not quality”. The contests in contrast provide “a uniform model irrespective of what deal is posted, be it a $10 toy or $1000 hdtv”. Makes a lot of sense to me!

Now what about that rank that social sites display next to each entry? It usually more or less reflects the number of votes the entry accumulated. It makes perfect sense in the Digg case — how else can you judge the value of a news story? It sounds like for shopping deals you could use more data to calculate that number. The item price (compared to the average price for similar items), the item popularity (number of clicks or sales it produces), the submitter credibility — all of these can be factored in to compute the deal rank. Isn’t it brilliant? I wonder why no one else has done it before?

Conclusion

I have been playing with Modoshi over the past month or so and the more I play the stronger the feeling is that they have implemented the best marketing strategy to make a social bargain hunting site a success. I am not saying they are already the best — the site navigation and functionality could be improved quite a bit — but they currently have the best bets at coming out the leader. Sorry DealsPlus, you are not my favorite any more. ;-)

RetailMeNot – New Social Coupon Codes Site

RetailMeNot creators are looking to replicate the success of BugMeNot (which is also their web site) by taking a similar approach and applying it in a different field — online shopping.

While BugMeNot is a repository of login/password data for different web sites — RetailMeNot stores coupon codes for online retailers. This taps into the market of traditional coupon databases like CurrentCodes and DealCoupon as well as the social bargain hunting sites like Trezr.

The distinct thing about RetailMeNot is their bookmarket which brings the coupons to where you really need them — your shopping cart. Bookmark the link in your browser and go shopping. When you found what you need — check if there is a coupon for it with a single mouse click.

While the web site is full of bogus coupons right now — inevitable result of sudden publicity — I expect the dust to settle down and the “social” part to kick in. Just need to give it some time.

Thanks to the folks at Consumerist for this tip.

Judysbook’s New Face Looks Green

JudysbookI have previously mentioned Judysbook’s new home page design here. After looking at it some more I decided that the event deserves a special coverage. Judysbook traditionally has been a destination to get reviews for your local businesses and is competing with such web sites as Yelp and Insiderpages. On September 13 they announced a new direction which actually got them into a much busier market niche. The announcement produced 22 mainly negative comments at the usually scarce for comments company blog. Here are just a few:

UGH! It’s just awful. If I wanted a shopping site, I would go to Amazon, or eBay. I go to Judy’s Book intentionally to get insight into and opinions from MY community…

…Why change what was unique about book? There are better deal sites all around, and this concept won’t gain traction the way you are thinking. You’ve just lost a user fellas!…

…Ick. I hate it. What used to be a review website has turned into nothing more than a mechanism for commercialization.

JudySo why the change? Well, the answer seems to be fairly obvious: money. Before you flame me off let me lay down my thoughts.

  1. Judysbook has been on the market for longer than Yelp and about the same time as Insiderpages yet it seems to be struggling to compete with the two in all aspects.
  2. Monetizing reviews business certainly takes more effort than living off of sales commission.
  3. “Social” is the latest buzz word and it is quickly spreading to on-line shopping. As Bob Tedeschi from N.Y. Times has put it “These sites are hoping to ride the MySpace wave by gathering people in one place to swap shopping ideas.”

The owners obviously got so sold on the “social” part that they rushed off to implement it without giving much thought as to how they are going to integrate it with the existing features.

As a company, we’ve had a bigger appetite for feature and scope than what we’ve been able to digest in terms of delivering users a quality user experience. I am aware of this fact and it is a flaw in our culture that I am working hard to correct.

The last quote is straight from Judysbook’s CEO Andy Sack’s blog.

I personally have nothing against a desire to make an extra buck or two – I just hope Andy has thought it through. Such drastic changes may very well send the old timers running to look for alternatives and I honestly don’t wish that to happen. Judysbook has built a devoted community which is their single biggest asset IMHO. My advice will be – don’t bet everything you have – no matter how green the pot may look.




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