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Published: Sunday, 8/19/2012

Local retailers say Diggit makes difference

BY JON CHAVEZ
BLADE BUSINESS WRITER
Evelyn Robinson, left, owner of School Matters, helps Aishah McLaughlin find school uniforms at her shop in the Great Eastern Shopping Center. Ms. Robinson moved her store from West Toledo this year. Evelyn Robinson, left, owner of School Matters, helps Aishah McLaughlin find school uniforms at her shop in the Great Eastern Shopping Center. Ms. Robinson moved her store from West Toledo this year.
THE BLADE/JEREMY WADSWORTH Enlarge | Buy This Photo

After moving her store from West Toledo to Northwood's Great Eastern shopping center this year, Evelyn Robinson was fearful that her previous customers would not be able to find her new location when it came time for back-to-school shopping.

But with a miniscule budget for advertising, she was at a loss on how to get the word out.

So she tried Diggit, a new deal-of-the-day Web site service that features discounted gift certificates or coupons usable at Toledo-area businesses.

"I think it did help. We finished that campaign maybe two or three days ago," Ms. Robinson said last week. "Fifteen people bought our coupons, although not all have been redeemed yet. But I had lots of people calling to find out where I was at. It really helped us."

Diggit, which officially launched in May and is a service provided by The Blade, is making some inroads with local small retailers such as School Matters.

"There's a lot of underappreciated merchants out there. This just kind of gives people a reason to try their business, and the best part is the merchant gets exposure but is only paying for the people that come through their door," said Ben Olin, community involvement manager at The Blade.

Mr. Olin began working to develop Diggit, which is officially known as www.diggit.tv, a year ago. A pilot program was begun that operated last fall, but it was shut down for re-evaluation and retooling.

When the venture relaunched in May, Mr. Olin said there were several improvements, including utilizing The Blade's advertising sales force to market the service to local merchants.

Most deal-of-the-day coupon services have a pretty similar business model.

A business, such as a restaurant or massage clinic, will use the service to offer potential customers the chance to buy a discount certificate (usually 50 to 90 percent off) for a limited time period. The deal is usually advertised through a Web site or via email or an app. If a certain number of people sign up for the offer, then the deal becomes available to all who bought it. When the coupon is purchased the couponing service makes money by keeping approximately half the money the customer pays for the coupon, while the retailer keeps the other half.

For example, a $40 massage could be purchased by a customer for $20 through a couponing service, and then the service and the retailer would get $10 each.

"It's a loss leader basically," Mr. Olin said. "It's like offering a 50 percent discount on a set of tires and hoping someone will come in and purchase an oil change and an alignment."

At the very least, he added, customers get a chance to familiarize themselves with the business, its location, and the service.

There is plenty of competition in the couponing Web site niche.

According to Forbes magazine, in 2010 there were 500 such services overseas and no fewer than 200 in the United States, including industry leaders Groupon Inc. and LivingSocial.

The number has surely grown since then, although more recent figures are not available.

Where Diggit differs -- and has allowed it has to gain ground quickly against competitors -- is that in addition to a Web site and emails to notify customers, daily deals also are publicized in The Blade, and commercials for Diggit are run on channels by Buckeye CableSystem.

Both The Blade and Buckeye CableSystem are owned by Block Communications Inc.

"It is the same concept [as Groupon], but executed much differently," Mr. Olin said.

That difference is what convinced Deet's BBQ in Maumee to use Diggit for a recent coupon offering.

The restaurant previously offered a coupon through Groupon and had a good experience, but a second firm that it used had contract details that upset the restaurant's customers, and a third service "was just a total scam," said Lisa Deeter, co-owner of Deet's.

"I was not interested in doing any more couponing," she said. But her fellow co-owners saw value in using Diggit and decided to give it a try, she added.

"I think it was the advertising opportunity that came with it, our name being put in all those newspapers, that convinced us to use Diggit," Ms. Deeter said. "The main thing was having all that publicity."

The restaurant recently offered a 50 percent discount coupon that 498 people purchased. So far, it's premature to say how much new business the coupon will generate, but many people have come to the restaurant after seeing the advertisement in The Blade, Ms. Deeter said.

Joseph H. Zerbey IV, president and general manager of The Blade, said the company is pleased with the venture's success and the revenue that Diggit has generated is "well above its budget" needed to support it.

"We're ecstatic at its success. It sold out for August and the month of September," Mr. Zerbey said.

Mr. Olin said that since Diggit relaunched in May it has worked with approximately 1,000 businesses that have sold collectively between 4,000 to 5,000 discount vouchers.

The venture's success thus far has been shared equally between the business community and the newspaper, he added.

"The whole thing is to give merchants who can't advertise traditionally in The Blade a way to advertise without having to put in a major expenditure up front," Mr. Olin said.

"If we do our job correctly people will come through their door, but if they don't, you don't lose anything," he added.

Meanwhile, local businesses get noticed and hopefully grow, Mr. Olin said.

"For us, if we can show these merchants the value of traditional advertisement, hopefully they'll partner with us at a later date and time," he added.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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