South Jersey Restaurants Lose with Groupon; Embrace a New Model

Nov. 2, 2011 - PRLog -- Over the past two years, daily-deal websites have become big business - to the tune of billions of dollars in revenue a year. For many merchants using these services, daily-deal website have been seen as salvation in a troubled economy. Yet, as it turns out for restaurants, this couldn't be further from the truth. Luckily, for restaurant owners in Camden and Gloucester county, there's a new option from South Jersey start-up BigSweetDeal, which solves the broken model of daily-deal websites, and places them back on the path of sustainability and profitability.

Daily-deal websites promise to help bring in new customers, with the expectation that even if a restaurant loses money, the customers will return and pay full price later. Yet for South Jersey restaurant owners, these were false promises. “What business doesn’t want to be busier? But where [they] succeed in making you busy, it comes with the reality that you will struggle to break-even ”, said Elias Bitar, who owns two restaurants in Cherry Hill.

Mr. Bitar’s opinion is all too typical, and reinforces why a recent study by Rice University, which surveyed over 300 merchants, found that only 44% of restaurants reported making money on a daily-deal, and only 35% said they would consider running one again in the future. “It's clear the model is broken, and that's why we decided to fix it. We launched a radically different approach with BigSweetDeal,” says BigSweetDeal CEO, Mark Rosenberg.

BigSweetDeal is an entirely different approach to helping customers save money, and creates a sustainable and profitable model for restaurants. BigSweetDeal is all about “Dinner for Tonight”. Each offer presented is valid for one night only, and must be used that night. This allows restaurants to offer customers steep discounts on days when they're slow, and more moderate or no discounts at all when they're busy. Another benefit to restaurants is BigSweetDeal’s opaque selling model - where the exact name of the restaurant is not displayed until after a purchase is made (think Priceline.com). Instead, customers are first presented with only basic information such as cuisine type, approximate location and quality rating before they make their purchase. This allows restaurants to protect their brand and avoid cannibalizing their full-price sales.

With the commission BigSweetDeal takes being about half of what daily-deal sites like Groupon charge, it's easy for restaurants to ensure a profit with each and every deal. Garrett Gillin, who is the co-founder and head of sales for BigSweetDeal, said “I’ve visited over 300 restaurants in south jersey over the past few months, and it’s clear they’re looking for something different. To compete in this economy, they need something that not only works in the short term, but is sustainable and profitable.”

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BigSweetDeal offers visitors deeply discounted certificates valid for one night only to high quality, independently owned restaurants in their area.