Can Women Live Without Sushi and Pedicures?
An economic downturn is no reason to go without a few luxuries, says Sharing Spree CEO Ron Sapp.
Sharing Spree, the deals site with a “social good component,” currently supports non-profits and schools in Portland, Ore., Nashville, Tenn., Birmingham, Ala., and Seattle, Wash.
“Schools and education – primary all the way through university alumni associations – are our main priority,” Sapp told Benzinga. “Child-related non-profits come in right behind, i.e. Children's Cancer Association and Make-A-Wish Foundation.
“Every day, the featured non-profit receives 10% of the proceeds of the daily deal. On top of that, buyers choose an organization from about 150 participating non-profits that receives 5% of every deal they buy.”
Sapp said that the primary market of Sharing Spree – which is on a charitable donation goal of $500,000 in 2012 – is suburban women. “In the economic downturn, many women cannot afford luxuries, such as pedicures or sushi lunches, so we provide deals with a social good component,” he said. “Sharing Spree succeeds at donating to local charities because it provides unmatched deals that drum up plenty of business from interested buyers.”
Since its debut in January 2011, Sapp said that Sharing Spree has “continued to grow exponentially.”
“With this growth, we've added high-quality merchants, new non-profits and new customers,” Sapp explained. “All three of these groups are influenced by the other two, as well as peers in their own group. For example, when a high-profile non-profit comes on board, other high-profile non-profits see the opportunity that Sharing Spree offers. When a great new merchant comes on board, new customers hear about the deal and sign up for Sharing Spree. This is how we've been able to grow the site.”
As Sharing Spree grew, “so has the potential to raise funding for our non-profit partners,” said Sapp. “Our studies show that Sharing Spree customers buy more often than the customers of our competitors. This means that although our database is smaller, we have customers who are invested in raising funds for both the featured non-profit, as well as their affiliated non-profit.”
Sapp believes that these customers “also have a commitment to helping their community thrive by supporting local merchants in this tough economy.”
“Because so many of our customers come in through our non-profit partners, we get a customer who is inherently more involved in their community and wants to assure that this community has businesses that are doing well,” he said. “There is a very steep upward curve in the speed at which we are raising funds for non-profits.”
With regard to how Sharing Spree selects its deals, Sapp said that the company “understands who its target customer is and thus structures and plans the deals accordingly.”
“We know what our demographic wants because we are tuned in to who they are,” he said. “We use our own team to get great ideas about what services, products and places we want to run deals for, since we are all squarely in the demographic. If we wouldn't buy it, then we don't offer it on our site.”
In the time since Sharing Spree was created, Sapp said that the daily deals industry has “changed a lot since we first entered it in 2010.”
“While the market is continuously growing and getting bigger, there are fewer and fewer players staying in the game,” said Sapp. “Those that are finding the most success are the niche players who are going after a specific demographic or offering a specific type of deal, and the big players, like Groupon (NASDAQ: GRPN) and LivingSocial. There really aren't many sites in between. There has been a major consolidation, and players are either backing out of the game or finding their own niche.”
Looking ahead, Sapp said that he expects more changes for the industry. “I see more daily deal sites heading into retail, and offering deals to sell products as opposed to services,” said Sapp. “I also think vacation deals will become an even bigger source of revenue for daily deal sites. And, although there has been some push back from the dental and medical fields about offering deals for procedures, I think consumers will see more of those types of deals offered.
“While many merchants run deals in order to grow their business, there is a small segment that will continue to run deals as a mechanism for survival, such as fitness clubs and gyms and cleaning companies.”
Follow me @LouisBedigian
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.