How AT&T Could Best Groupon (Hint: Not Just By Saving You More Money)

AT&T expands its forays into the daily deals space, this time through Why a telecommunications company may have a natural advantage in daily deals.

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AT&T is trying to get a larger piece of the daily deals market, through its subsidiary. It's preregistering people for daily deals on the site, and offering them $10 toward their first offer.

Every day sees another Groupon clone. But AT&T may have a natural advantage in this space. Here's why.

Daily deals are not, at their core, about saving you money. That may seem absurd—the reason they work is because they're deals, right? Not totally. There are other features to buying a deal from Groupon or LivingSocial or anyone else that are more important. The aspect of bullying yourself into being someone you want to be—much like prepaying for a gym membership—is part of it. Even more important, though, are the elements of serendipity and sociality. These two words drive the daily deals space to an extent few Groupon subscribers probably consciously realize.

AT&T already knows a thing or two about serendipity in the daily deals space. Back in February, it launched "Shop Alerts by AT&T," an opt-in service that would text you deals at retailers near where you happened to be at the moment. K-Mart, JetBlue, and Kibbles 'n Bits signed on as early partners in the service, which debuted in New York, L.A., San Francisco, and Chicago.

But those offers were presented to individuals, one at a time, who decided whether or not to take advantage of the deal. End of story. If AT&T wants to pull ahead in this space—and, who knows, maybe even catch up to Facebook's Deals—it might combine the "geo-fencing" idea of Shop Alerts with the ability to quickly share those deals to all or a subset of your contacts via SMS, with the press of a button ... without charging you SMS or MMS fees. If it does that, the combination of serendipity—a deal at a retail location near where I happen to be now—and sociality—a deal that I can share instantly with my friends and family—will be difficult for Groupon to catch up with.

We reached out to AT&T to ask more along these lines, but they're being tightlipped, offering only a bit of boilerplate, which we'll include in the interest of thoroughness:

Given AT&T’s unique assets and reach in local search, entrance into the daily deals marketplace is a natural opportunity to expand a nearly $1B local advertising business and offer another way for merchants to connect with consumers. Consumers in Los Angeles, Atlanta and Dallas/Fort Worth interested in receiving the deal of the day once it launches are encouraged to sign up now to receive $10 off their first purchased deal. The initial 3 cities were chosen based on consumer and advertiser engagement opportunities and existing relationships.

What seems clear is that if AT&T has a Groupon-killer in the works, this ain't it. This is just a grab for a small sliver of an admittedly huge pie. Even so, the are arguably a step in the wrong direction. An AT&T spokeswoman has said that the deals will initially go out via email only, though they might add a mobile component in the future.

This isn't innovation in the daily deals space. It's innovation in the yellow pages space—that least innovative of business discovery services.

Follow Fast Company on Twitter. Email David Zax, the author of this post, or follow him on Twitter.

[Image: Flickr users Sanctu (top); Marc Samsom]

Read More: Most Innovative Companies: Groupon

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  • Guest

    Stay away from AT&T! AT&T is ripping off small businesses on a daily basis with their horrendous PPC advertising product - ypConnect. They scam small businesses into believing they get the best rates for advertising from Google, etc. and then charge them outrageous rates for ads that would be from 1/10 to 1/100 of what they would pay to do it themselves or through a reputable firm. They refuse to provide price per click data and they have on a repeated basis screwed up the targeting for my clients and then been unable to fix it. They actually use an outsourced firm that does provide the data to their other clients, but AT&T is charging such horrible rip off levels of rates, that they can't tell their clients what they pay.

    They are harming small businesses all over the country and not delivering on their promise, when they could become a partner to small businesses and help them grow.

    Dear FastCompany, I'd be happy to write up this piece for you with 2 quotable clients. This scam is happening all over the country. One of my clients is still going through horrible back and forth on getting her money back(over $7000 is scams) and is now ready to sue them. Another just gave up. I've been on the calls with the sales people that don't know that I know what I am doing as they pontificate on the great buying power they have then proceed to screw them out of a minimum of $600 per month.

    Any small business that does business with AT&T's advertising products would be better off burning half the monthly fee they charge and buying their own ads with no training.

    Dear AT&T, please sue me, so I can expose what you are doing to American small businesses. I welcome the opportunity to get politicians involved in regulating you further.

  • Alex

    This is great news for the industry and more so for the consumer. AT&T will definitely increase the level of competition and quality of daily deals that we see. I just hope that it is not at the expense of the small business owner.

    I am in Toronto and am an avid user of daily deal sites. I usually visit which has all the deals organized in one place. I don't remember the last time I paid full price at a restaurant.