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February 20, 2014

Groupon's 'Deal Builder' Mimics LiveDeal, Met with Underwhelming Response

For the past six months, LiveDeal has been making waves in the online deal space and is becoming a hit with both customers and merchants for everything from retail sales to food. LiveDeal offers an “instant deal” platform which allows merchants to place coupons that will only exist during specified periods of time, allowing merchants to guide customers within their storefronts during the hours that they’re most needed. In fact, LiveDeal has become such a trend-setter that Groupon, another popular coupon site, has launched a similar program called “Deal Builder” earlier this month.

Unfortunately, Dealbuilder is not quite as flexible as LiveDeal is, and several restrictions mean that many of the key benefits that made LiveDeal so popular are non-existent. Like LiveDeal, the Deal Builder is a self-service option for local businesses that would like to create and publicize their own customized deal through mobile shopping. However, because Groupon could not simply directly copy over the same program to their own services, they are unable to capitalize on many of LiveDeal’s strengths.

For starters, LiveDeal’s popularity stems from being a model for creating real-time business without the need of a middleman, both aspects which Groupon seems to have largely ignored. Groupon will be charging retail stores and restaurants large fees to broker deals, directly acting as a middleman between merchants and customers in order to get their cut of the deal. In addition, all of Deal Builder’s promotions are one week in length, allowing customers to take advantage of the offer at any point during the week.

Image via Shutterstock

While this may be more convenient for customers, it removes a large portion of the merchant’s ability to control how long or when the deals are available. This makes it much harder for businesses to drive traffic at the times they need it the most. On the other hand, LiveDeal gives businesses the ability to stop, play and even pause their deals if they are unnecessary, allowing owners to adjust deals based on real-time customer traffic.

Ultimately, this is a case of Groupon trying to tack on a fully-featured program like LiveDeal onto their existing model as an add-on, where it simply will not fit. LiveDeal works because it is so specialized towards allowing merchants to interact directly with customers. Since Groupon can’t offer the same services without creating a standalone program, Deal Builder simply can’t offer the same services

Edited by Alisen Downey

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