Niche Sites Do Deals Right

Whether or not the online group-buying trend maintains long-term success is still up in the air. But, one way or another, daily deals are here to stay

Most likely, the industry will persevere because of sites that can offer niche products that appeal to targeted demographics. Many of these sites already exist and do quite well, and some of the biggest names in the daily deals game would probably do well to pay attention.

Tee Time
Personally, I'm not really one for fashion. I do, however, like a good t-shirt, and was thus excited when I discovered that there was a plethora of deals sites out there that offer unique, original shirt designs at extremely affordable prices. These sites, including TeeFury, Design by Humans, Qwertee and more, offer a brand new original t-shirt every day or every few days, depending on the site. The shirts are on sale for a limited time only.

The best part is that they're cheap. Most sites offer shirts for around $10-$12 apiece and, in most cases, the artists/designers take home a significant cut of the earnings. Although these websites aren't exactly household names like Groupon or LivingSocial, they have inspired a dedicated following of customers with the simple, effective business model utilized by many other niche daily deals sites. Within this template, there are three primary characteristics that have supported the success of these sites thus far, and could sustain them for the foreseeable future.

Audience Awareness
If there's one thing that sites catering to targeted audiences should excel at, it's understanding what their customers want. This may seem a bit obvious, but it can't be stressed enough.

The audience is already built-in when you run a niche deals site, meaning that the real challenge is in trying to provide deals for products or services that will be valuable to the targeted consumers. As an example, many t-shirt deals sites will have designs that are similar to other past items that sold well, signifying customer interest.

By paying attention to the desires of their consumer base, these merchants are able to provide products in line with what their users want and expect. It's the proverbial win-win situation.

If I'm looking for a deal on a massage package or a night out at an Ethiopian restaurant on a group-buying site like Groupon or Living Social, but I'm not sure if I'll be using the deal in the immediate future, I almost never buy the first one I see - even if it's a great deal. This is because it most likely isn't going to be the last time they provide such a deal. In fact, a little searching usually leads me to very similar offers that are available at the same time.

And this model clearly has its benefits, as it allows companies to continue to offer the same popular items that many users want. However, it can also lead to customers becoming disinterested in the same products and services because they are offered too often. This diminishes the incentive to buy a deal, especially with any immediacy if users think they can just wait a few weeks to see something similar.

On the contrary, niche deals sites are very adept at offering exclusive deals within a limited time frame. This makes the immediate purchase almost a necessity and is thus an effective way to increase conversions. Sites like TeeFury offer one-of-a-kind designs for just 24 hours, meaning that customers don't have a lot of time to weigh their options.

Make it a Deal
If nothing else, these niche sites always make sure that their offers are truly deals. Anyone who regularly buys t-shirts will tell you that $10, especially for an extremely rare and limited design, is a real steal. And since the purpose of these daily deals sites is (or should be) to provide products or services with restricted availability for a considerably lower price, they're definitely doing it right.

Often, larger deals sites will offer half off on a common product or service, which can be extremely useful to two types of customers: those who frequently use that product or service, and those who would maybe like to try it but haven't had the proper incentive to do so yet. Niche deals sites, however, are able to create interest and demand for their products and services by providing things that their audience wouldn't otherwise be able to get for such a low price.

In essence, they are able to build the incentive to buy right into the deal by offering rare items at a great price. This automatically makes the deal appealing to audiences, so as long as they're interested in the individual product or service, making the purchase becomes a no-brainer.