INVADELA

Case Study: Daily Deals & InvadeLA App

In 2011, companies like Groupon and LivingSocial were promoting huge discounts to drive customers to restaurants and other retail merchants. Over time it became clear that these offerings were not sustainable for small businesses. Running these campaigns became more of an advertising investment, rather than a profitable one, and unfortunately sometimes led to businesses closing their doors. I wanted find a better way for businesses to offer incentives to their customers while still maintaining profitability, but first I needed to understand why deep discounts were not working. This kicked off our initial discovery and user research.

Source: Daily Deals: Prediction, Social Diffusion, and Reputational Ramifications

Luckily for us, there was plenty of resources on the web to validate some of our hypotheses around profitability. Businesses ran these deals knowing they were not profiting on the first visit, because the intention was to just increase aquisition of new customers. For the most part it got new customers through the door, but not so much with retention. When customers used their vouchers, it de-valued the services and food they were buying so they didn't feel they should pay full price on their next visit. In our ongoing research we also found something even more concerning. There was a direct correllation between running these promotions and a decline in ratings on Yelp. Not only did the merchants lose money, it hurt their reputation.

Based on this study, the data allowed us to conclude two main points in regards to the impact of daily deals from Groupon and LivingSocial:

  • Sales and revenue were relatively flat and trended downward when looking at a per-deal basis week-over-week

  • While there was an 84% increase in reviews, there was an average 0.12 drop in ratings after a deal was offered


Competitive Analysis: Who's Doing it Right?

Now that we've identified what not to do, we asked ourselves who out there was doing it right? In our competitive analysis, we surveyed various merchants that were running customer promotions through various advertising outlets and identified a few key players in the deals space.

Both Foursquare and Yelp ran similar deals to Groupon and LivingSocial in that customers were only able to redeem them once, but they were doing them through digital coupons which could be redeemed through their mobile applications. On the other side, Fivestars and KCRW Fringe Benefits pushed small discounts and promotions that promoted repeat visits, however they were using a printed membership card for redemption. Knowing we did not want to go the single deep discount route, we focused our attention on customer loyalty programs that promoted retention with smaller incentives.

  • "Digital coupons were transforming the coupon marketplace – bringing in new users, and gaining heavy redemption from prolific couponers in more traditional user groups."


  • "Motivating 20% of your guests to visit 20% more often drives a 4% increase in revenue while boosting profitability."


It started to become a little clearer that we would need to marry both approaches to find what would eventually become our business model and method of delivery. Through a mobile app we'd offer discounts to customers that could be redeemed every visit, while ensuring business owners that their sales are still profitable. Piece of cake, right? Well, not so much. Building a mobile app was a significant investment for two guys in their 20s, so we decided on an approach that would first validate direction through a POC (proof of concept) and minimal investment.


Proof of Concept: Physical Card + Website

Before launching our service, we signed up over 100 merchants using just a Photoshop mockup. This was eventually converted to a Magento website where users could order the InvadeLA membership card online. Users could search through a directory of merchants, but this was not practical when looking for somewhere to eat in real time. We always knew we wanted to transition to an app as it would allow users to quickly find merchants nearby, but most importantly give us visiblity into usage.

The InvadeLA card was presented to merchants to earn discounts (10%, 15%, and 20% off) on each visit.
The InvadeLA website allowed users to look up our merchant partners and discount offerings.

Tapping Into Our New Users

Although the POC did not deliver user experience we intended, it did deliver one thing - users! We now had two user segments in both InvadeLA merchants and customers which we could activate and build our personas against.

As cardholders ourselves, we also wanted to see what the experience was like when redeeming the offers. We started our own blog to highlight some of our restaurant partners, but really it was used as a chance to experience the pain points of both sides to better inform how we could resolve this problems with a native mobile app experience.


Designing the Digital Experience

As mentioned before, the goal was always to move from a physical card to a mobile application. We knew that the transition would solve many of the problems that were validated through user feedback. Our members had a hard time finding the businesses that offered them discounts through the website since they were rarely near a desktop computer when deciding where to eat. Flashing their InvadeLA card also brought some awkward moments when staff did not remember the discount rate offered and had to re-confirm with management.

Knowing these were the main challenges, we focused on findability and highlighting the merchant's offers when searching and browsing locations. Taking inspiration from Yelp and Foursquare, displaying a map of available offers was used as the default view. Users were also able to browse by categories, similar to an E-commerce shopping experience, where narrowing down by restaurant type was a familiar pattern as used in other applications. I created user flow diagrams to help us visualize and understand how our users would move through the application and redeem their discount.

Information architecture for our Nearby and Browse features with views and actions Click to zoom Visual user flow diagram created to showcase the browse feature

Design & Development Hand-Off

In an 8 month period I worked with closely with an offshore development team to build the InvadeLA native app. Although we worked mostly in a waterfall methodology at the time, this effort still required a high standard of planning, technical requirements, and constant communication to ensure that features were delivered as designed. Back then Photoshop was the most commonly used design tool, so I would splice up the mockups and export all the design assets for the development team. These would be supplemented with design specifications and annotations like the ones shown below. These assets helped with the development handshake, providing a visual reference with the feature requirements, and also served as an artifact for design QA testing the build. As new tools like Invision came into play, I would create high-fidelity prototypes to help illustrate user flow and transition behaviors.

Click to zoom Annotations showing differences between original design and developed product


  • Video sent by the dev team of the first build in iOS 6
  • Invision prototype of the application updated to iOS 7

Ready for Launch!

Moving from a physical card to a native app also meant the entire website needed to be redesigned. Knowing that we could now send users directly to the app store, I made sure the website was responsive to help streamline new user acquisition on mobile devices. The website also simplified the sign up process for new partners joining our network.

The app launched on January 1, 2013.


Conclusion

For a two man startup, I'm still amazed at what we were able to accomplish in such a short time. This project solidified my transition from a web designer to a user experience designer and strategist. During the apps availability, we hit some key milestones that I could not have imagined when we first started.

  • Signed over 400 merchants in the Greater Los Angeles area

  • Featured on Refinery29, contributing to 1200+ downloads in one day

  • Built a 25K strong following on Instagram

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