What used to be the myth of the pink dollar has grown exponentially into a demographic that now commands its own coupon sites.
Two new deal sites specifically for LGBT consumers have joined the market. Direct Male, a site by LGBT marketer Andrew Isen, launches in mid-June. Direct Male will offer dining deals and product coupons to an exclusively male audience (by the title). A second site, Out Escapes, which is already live seeks to capture the lucrative upscale gay travel market. Out Escapes is co-founded by travel writer Jimmy Im.
Only moms were thought to have this level of financial stickiness before. However, it's a new day is here as more Americans warm to the idea of gay rights and consumers grow comfortable stamping their identity on their transactions.
Mega deal site Groupon reported a 90 percent increase in revenue in the first quarter of 2012. In March Groupon stock jumped 18.5 percent and niche competitors began salivating at the opportunity.
Talks of recession are great for business. Consumers look for deals (perhaps spending more in total than they would otherwise), deal sites are eager to capitalize on this and niche market sites, like Direct Male and Out Escapes, are keen on taking advantage of the huge financial opportunity as well as LGBT customer loyalty.
Like Facebook with social media and Groupon with discounts, more niche deal sites will sprout from their success--especially as consumers stay loyal to their demographics.
The market is fierce, however. The Daily Hookup, an LGBT-marketed deals site went bust last year. But with 25 years of marketing experience, Isen seems hopeful that Direct Male will deal in success with over half of its offering advertised as LGBT-specific products.
Although the gay-based market is large, Isen and Im from Out Escapes seem to overlook an important point: Many, if not majority, of deal site consumers are digital-couponers, deal-seekers, value-shoppers, frugal lifestylers... All fancy words for people who love to save a dime (even when they have one).
This isn't to say gay deals sites are missing the mark. There are plenty of LGBT consumers who love to consume luxury goods. In order to be giants, however, gay deals sites will have to take a lesson from the cheap living playbook and offer deals for the broke as well as the beau monde.
To help them out I turned to the low-cost experts, About.com's Frugal Living guide Erin Huffstetler. Top 11 Ways to Start Living the Frugal Life is a how-to guide for those ready to start a frugal life. Here are ways LGBT deal sites can capitalize on frugal living opportunities:
- Huffstetler says the first step to becoming a frugler is to befriend the library. Not a bad concept. What better way to get our country reading and save a buck at the same time. LGBT daily deals sites can offer 2 for 1 deals on library cafe purchases, discounts on book fines and reduced fees on copy and other services, especially if the library promises to move their LGBT book sections up to the front.
- Next, Huffstetler suggests grouping errands to save on fuel costs. LGBT deals sites should take this a step further. Forget negotiating deals with local lounges and clubs, how about the curbside gas station? Gays need gas, too. I imagine a day where Shell stations across the country advertise special discount days for LGBT drivers. At $5 a gallon I'm sure a lot more people would come out.
- My final suggestion from Huffstetler is to look for freebies online. This would seem an obvious marketing point for LGBT deal sites, but how far are they willing to go? The LGBT rainbow is plentiful, but often marketed without much color. LGBT families, trans, LGBT people of color, youth... Everyone likes deals. Huffstetler says look for free or discount kids' parties. This extends to cultural events and products specific to different demographics of the LGBT community.