How to Compete with Daily Deal Sites

Recent reports show that daily deal sites, like Groupon and Gilt Groupe, are losing some momentum, due to the fact that consumers are being overwhelmed by deals and are getting bored of the daily onslaught. (Traffic to Groupon has fallen 13% since the beginning of the year, while Gilt Groupe’s traffic has dropped 20%, according to CNNMoney.)

But this may be good news for apparel retailers who have seen these daily deal sites as tough competition, especially the high fashion sites. In fact, this is the time for specialty stores to show customers their advantages—educated staff, a personal shopping experience, add-on services like tailoring, and compelling promotions. Another great benefit specialty stores have is that regular customers know what to expect from them in terms of quality and service and are familiar with their products, while daily deal sites can be a gamble.

However, there are some good reasons why these deal sites have done so well, and specialty stores can learn some important lessons from their overall success when it comes to planning promotions. After all, there’s a reason why Gilt managed to bring in an estimated hundreds of million of dollars last year.

So, how do you plan promotions that can take the best of what the daily deal sites have to offer, while adding the advantages of a specialty store?Here are a few tips:

1) Urgency—If there’s anything we can take away from the success of the daily deal sites, it’s that a sense of urgency is key in motivating customers to buy now. This is especially important post-recession, when consumers have come to see 20% off as the new full price. You have to offer something unique and compelling to get customers to jump. A one-day only event where you offer 30% off some items and a personal style consultation highlighting new spring/summer product is far better than a 3-day, 20% off sale.

2) Measured Contact—You have to carefully plan your online promotions to make sure that your customers are enticed, but not overwhelmed, by your emails. Experts recommend reaching out to your customer base no more than twice a month with sales pitches (some emails should be purely informational), but it depends on your operation. If you have a highly promotional store you may want to reach out more, but make sure to ask customer how much they’d prefer to be contacted, and measure the success of your campaigns by looking at click-through and unsubscribe rates. Plan out your promotions and email campaigns for each season ahead of time to make sure that your contact with customers is consistent but not intrusive.

3) Make it personal—One thing the daily deal sites and mass-market stores do not do is provide the personal touches that make customers feel valued. So, when you plan your promotional events add something personal like a one-on-one consultation with the tailor a stylist, or a closet organization service. For online promotions, add personal incentives for leaving comments on your blog or “liking” your store on Facebook, such as an invite to an exclusive in-store event. When customers feel like they have a personal relationship with your staff and your store you will see a payoff in loyalty.

4) Make it memorable— Don’t just throw your regular seasonal events and online promotions– design a campaign that’s memorable. For in-store events, add a fun element, such as live music, food and drink. You also want to have a theme in your marketing campaign that sticks in customers’ heads. It may be a spring theme, highlighting sunshine and outdoors, or it could be an event where portions of the proceeds go to a charity. Make your email marketing campaign fit the theme so your promotion stands out, and is not just another daily deal.

5) Follow Up—Check in with your regular customers after the event to see what they thought of it. What did they like and what could you improve upon? Just asking these questions shows your customers that you care about having an ongoing relationship.