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Belly wants to reinvent the customer loyalty system

bellySince location-based deals first appeared on the horizon, a new wave of e-commerce companies have been making a play for small businesses’ business. The likes of Groupon, Google Offers, and LivingSocial (and the endless amount of clones) have been leveraging their assets to convince local retailers that they have what it takes not only to increase sales but to add a little social flare to the companies in question.

How effective this is has been heavily debated. It’s gotten to the “Groupon is bad for America!” point for detractors, who argue this discount-based culture is creating a dangerous attitude in consumers and a risky business model for retailers. Vendors are largely fed up being asked to participate with these various daily discount sites and increasingly wary of the effects: who is this setup really benefitting? Who is getting the return customers?

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Enter, Belly.  The rewards-based service, which launches today, wants to replace the stamp card, and actually helps small businesses attack the digital incentive market. Step one: outfit participatng retailers with an iPad (yes, that comes with your membership).

After that, the basics of Belly might sound fairly familiar to other mobile payment platforms. Retailers pay per month for cards, marketing materials, and customer data software. Consumers can use one of the provided cards or the smartphone app (available for Android and iPhone) to scan their participation per visit and point of sale. You can also use the Belly-provided iPad as well. This, of course, leads to loyalty rewards.

Belly offers a free trial as well, so getting up and running seems relatively pain free for interested merchants. And it’s unequivocally easy for consumers as the smartphone app will tell you the participating stores in your area. It’s a welcome alternative for users who appreciate the benefits of Foursquare and like-minded apps but get lost in all the other platforms these check-in services try to tie themselves to.

We’d expect some resistance on the retailer end. This sector has grown incredibly disenchanted with anything even resembling a daily deal service, so Belly might have something of an uphill battle initially. But apparently it’s been growing quickly: according to company’s press release, “In just 12 weeks since its pilot launch, Belly has already racked up more than 18,000 users and 50,000 check-ins. Many stores are seeing more Belly check-ins than all other check-in services combined.”

Also a positive indicator of Belly’s potential is a recent, generous investment from Lightbank (a venture firm from former Groupon executives). In all the local-meets-e-commerce-meets-social chaos from the past few years, it’s difficult to pick out a sustainable model that benefits buyers and sellers equally. Belly could be a step in the right direction. 

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Groupon sues two former employees who left for Google Offers

Groupon has sued two former employees who last month joined one of its direct competitors, according to papers filed in an Illinois court on Monday. Groupon claims the pair took with them confidential information belonging to the company.
Bloomberg reports that Michael Nolan, who was at Groupon for two years, and Brian Hanna, who started working there at the beginning of this year, left the daily deals company in September for positions with Google Offers. The pair worked as sales managers for Groupon.
The daily deals company also claims that they have breached an agreement whereby they wouldn’t work for a direct competitor for the next two years.
The filing says that “in their new positions with Google Offers and/or Google, Hanna and Nolan will provide the same or similar services as they provided at Groupon,” which means they’ll have to “employ confidential and proprietary information that they learned while employed at Groupon.”
Groupon is attempting to get a court order to prevent Hanna and Nolan from disclosing any confidential information which belongs to the company.
The news comes on the same day that Groupon’s IPO roadshow kicks off in an effort to generate investor interest in its stock. The Chicago-based company hopes to sell 30 million shares for between $16 and $18 in an effort to raise as much as $540 million. This would value Groupon at $11.4 billion. Late last year, Google offered to buy Groupon for $6 billion but the bid was rejected. Less than six months later, Google launched its own daily deals service, Google Offers.
 The daily deals business has boomed since Groupon launched in 2008, and has already reached saturation point. Many competing companies have fallen by the wayside in recent months, while Google Offers continues to expand. It currently offers daily deals in more than 12 US cities, with launches for 25 more cities planned for the near future.
While Google Offers may not be as big as Groupon just yet, the original daily deals company is nevertheless keen to keep ahead of the game and ensure that none of its former employees share any information relating to its business practises, although it may, of course, be too late.

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Groupon tries to solve its biggest problem with loyalty rewards

Say what you will about Groupon, but it’s managed to stay on top of the daily deals game despite the mass amount of bad press concerning its bumpy IPO process. The coupon curator market might be oversaturated, but the veteran service has remained the top stop among its various competitors since day one.

And now it’s branching into loyalty rewards, stepping into territory previously held by rivals that differentiated themselves by being based on this service. The likes of Foursquare and Gowalla were the original purveyors of rewarding consumers for their local tastes, and when they caught whiff of the massive industry shift Groupon was creating, neither hesitated to jump on that train and take part in daily deals.

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Facebook gets rid of Deals

Facebook announced late Friday that it would be bowing out of the daily deal business. The Groupon-inspired Facebook Deals was discontinued after only four months of testing.
In a statement received by Reuters and other outlets, a Facebook spokesperson wrote:
“After testing Deals for four months, we've decided to end our Deals product in the coming weeks. We think there is a lot of power in a social approach to driving people into local business. We've learned a lot from our test and we'll continue to evaluate how to best serve local businesses.”
The end of Deals seems like a logical follow after the nixed Facebook Places app, though the company insists that it will still maintain the Check-in feature as well as Ads, Pages, and Sponsored stories; local business aren't being completely shuffled aside.
Facebook Deals began its short-lived existence in April this year, sparking anticipation of heated and frenzied competition with Google Offers, Living Social Groupon and the other sites packed into the cramped pool of local-discount services. Deals had already put down roots in five major cities, set up deals with merchants in the area and set up offers with other daily deal companies such as ReachLocal, OpenTable, Tippr, aDealio and more.
Does Facebook's retreat say something about the daily deals business?
The vacancy means less pressure for those still in the game (looking at you S-1 filing Groupon), but there has been some criticism of Groupon's business model and talk of the daily deals enthusiasm waning.
Co-founder of Vinicius Vacanti weighed in on the topic, telling Reuters, “I don't believe this means daily deals are not a viable business. It more suggests that large media and tech companies can't just 'turn on' daily deals and expect them to work. It has to be more thoughtfully integrated into their existing product.”

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