The deals culture is shifting from customer acquisition to customer loyalty by necessity. Why? Deals have begun losing high income women. That’s the view of Next Jump CEO Charlie Kim, a featured speaker at ILM East in Boston March 26-28.

“Daily deals had an initial surge then quickly lost flavor on a key customer segment – higher income women with jobs,” says Kim in an email exchange with us. “This segment is the most profitable to most merchants. Acquiring them as a loyal repeat customer is worth quite a bit over any other customer segment.”

Are deals really losing these women? Kim says that the explosion of daily deals have lead directly to lower conversion rates. “Daily emailing of 50 percent discount offers quickly turned from value to fatigue users,” he says. “Email response rates and all conversion rates had a downward climb across almost every vertical. That’s echoed by all the e-commerce merchants we have talked to.”

Loyalty programs such as those run by Next Jump, however, have begun to reverse the downward course “Towards the second half of 2011, we managed to climb conversion back up. This was not done via targeting, but through loyalty. The growth of loyal repeat visitors increased conversion rates at every level 50-150 percent higher, category by category.”

Kim says that loyalty is mostly measured as a by-product of points and rewards. “From 2010 to 2011, as the points platform got stronger, we saw metrics increase as follows: 100 percent increase in first-time visitors converting into a transactor. 300 percent increase in single-transactor converting into a repeat loyal transactor.

Kim adds that the big trend on the horizon will be ease of purchase — convenience. “Make it easy for me to find and buy what I need,” says Kim. “Earn my trust as a consumer, and even at good prices (not best), you will have my wallet share. This is how you earn loyal customers.”

Charlie Kim is a featured speaker at ILM East, which takes places March 26-28 in Boston. Other loyalty-related speakers include Jim Douglass, SVP, Cartera, and John Valentine, VP, SCVNGR/LevelUp. You can register here.

Amazon.com, which is moving in multiple directions vis a vis local, has agreed to buy TeachStreet, the service for matching teachers and students. Amazon’s interest appears to be less in TeachStreet than in the underlying ecommerce platform for SMBs. The platform already is being used by The Washington Post for its Service Alley SMB leads service.

TeachStreet had raised just over $3 million from Madrona Venture Group, Bezos Expeditions, Hulu CEO Jason Kilar and others. Amazon CEO Jeff Bezos has been involved form the beginning of the company.

The connection between Amazon and Teach Street is partially personal. TeachStreet founder David Schappell previously worked for Bezos from 1998-2004. GeekWire reports that the entire TeachStrret team has already joined Amazon Local, which now has offers in 40 markets. It reports that TeachStreet itself is being shut down.

Schappell also told Geekwire that he’s pumped to be “working on things that millions of people use.” At TeachStreet, he said they had been “pushing the peanut up the hill for a long time.”

In 2008, Schappell told BIA/Kelsey that he eventually expected TeachStreet evolve into all kinds of expert services. “We’re helping to find local experts near you,” he says. Categories could include a full range of advisory services, such as career counseling, or kitchen remodeling. “You might need someone to guide you through some of the steps. Or you may want some help negotiating to buy a car.”

ILM East is coming back to Boston March 26-28 with a lineup of do-ers and innovators that are transforming and re-defining the local space.

Highlights include a featured keynote from industry legend Ted Leonsis (Groupon Vice Chair/Amex Board Member/Sports team owner/AOL mastermind), along with keynotes/interviews from Jason Calacanis, Leslie Berland, Jay Herratti, Michael Zimbalist and Michael Silberman.

Other highlights of the 2 ½ day event includes a pre-conference rundown on Local search run by Andrew Shotland of Local SEO Guide; a full plate of Top BIA/Kelsey research and forecasts; a special Venture Capital panel; and innovator panels on Social, Mobile, Deals, Video and Hyperlocal (the latter co-moderated with Merrill Brown.)

KEYNOTES/KEYNOTE DISCUSSIONS
• Ted Leonsis: Owner, Monumental Sports (Washington Capitals, Washington Wizards;) The Vice Chair of Groupon;, Board member of Amex, former Vice Chair of AOL; Author, The Business of Happiness
• Jason Calacanis: CEO, Mahalo; Investor. Calacanis’ career has been at the cutting edge of local and social media and reflects all the big trends, from his development of The Silicon Alley Reporter to Weblogs (AOL), Mahalo, and the creation of TechCrunch50 and Launch.
• Leslie Berland, Vice President, Social Strategy, American Express. Berland’s a major deal maker deeply involved in Amex’s mega FourSquare and Facebook deals.
• Jay Herratti, CEO, CityGrid Media. Herratti always gets top rankings at our events. He runs IAC’s super quad of the CityGrid Media Network, Citysearch, UrbanSpoon and InsiderPages.
• Michael Zimbalist, VP, Research Operations, New York Times Co. Zimbalist leads the NYT’s 12 person research unit. He’s deeply immersed in cutting edge social, mobile, tablet and video efforts.
• Michael Silberman, GM, New York Magazine Silberman is the mastermind of NYMag’s development of a super set of verticals catering to the “New York state of mind.”).

FEATURED SPEAKERS
• Bill Bice, CEO, SpaBoom
• Merrill Brown, co-founder. MSNBC.com, Court TV
• Jim Douglass, EVP, Cartera Commerce
• Jere Doyle, CEO, EverSave
• Walt Doyle, CEO, Where
• Adam Japko, CEO, Digital Sherpa
• Maria Kermath, Dir.,, New Tech & Sales Apps, AT&T Advertising Sales
• Mark Josephson, SVP, AOL Local
• Charlie Kim, CEO, Next Jump
• John McIntyre, CEO, Pixelfish
• Randa Minkarah, SVP, Revenue, Fisher Communications
• Randy Parker, President, SMB Apps
• Mark Schmulen, GM, Social Media, Constant Contact
• Andrew Shotland, Publisher, Local SEO Guide
• Andy Slater, VP, Digital Agency Sales, Katz 360
• Christopher Tippie, CEO, FindNSave
• Darren Waddell, EVP, Product and Corporate Marketing, Reply.com

Join hundreds of senior level local executives at ILM East for the local community’s best networking and insights. You can register here for earlier bird rates.

Internet Pioneer Ted Leonsis

The ability to marry store inventory with search and promotions is an intriguing one for interactive local media. But what closes the loop on this vision?

Sherry Thomas-Zon, VP, Local Shopping, Local Corp – the new name for Local.com – suggested this week at ILM West in San Francisco that inventory can serve as an anchor for a 360 shopping offering. The key is to break the components of shopping into functional departments instead of making it “one size fits all.”

“The opportunity is to add value across the retail mix,” says Thomas-Zon, former President of Krillion, which was recently acquired by Local. You don’t just want to have shopping content. “You want a shopping module. It is what product search looks like on site in a mobile context.

Speed and convenience is a key part of it. Components include grab and go shopping, need it now, where to buy, nearby stores. She notes there are different types of shopping.

For instance, there might be high consideration items, contrasting with shopping types such as low cost replenishment, habitual purchases with limited decision making, big box stores, off price stores and small format products.

The idea of an online marketplace has continued to evolve dramatically in 2011. With the emergence of deals, we now have full-fledged Interactive Local Commerce in place, in addition to advertising.

It seems that everyone has jumped into the pool. Where Marketplaces had previously been dominated by players such as AutoTrader, eBay and OpenTable, everyone from Facebook to FourSquare to Visa have developed non-advertising (or advertising +) Marketplaces strategies. As we approach our year-end ILM West conference, what can we expect for 2012?

Here’s some of our top-line “predictions”:

1. Amex, MasterCard and Visa along with banks will seek to differentiate themselves from others by making key acquisitions in the vertical and mobile space during 2012.

2. SmartPhones will increasingly be seen as transactional tools for food ordering and other services. In many cases, transactions will prove to be the real road to mobile adoption, more than apps and content.

3. Point and Rewards/Membership programs will evolve for local shopping, with more companies trying to rope-in frequent ,high value buyers as members that have minimum purchasing requirements. The prototype, followed by Living Social and others, are credit card promotions and Amazon Prime.

4. eBay will continue building its international classifieds business, and will extend into local retail via Milo. But inventory (or eBay) won’t reach deep into the SMB space in 2012. They’ll mostly focus on larger retail sites.

5. Review sites such as Yelp are currently one-size-fits-all. But they’ll be increasingly differentiated by targeting and social technologies that better personalize reviews and other content, and move into transactions/reservations as well.

One of our big complaints against hyperlocal sites is they haven’t really invested in the commercial lifeblood of their community. They’re more like the (almost totally irrelevant) equivalent of a public access cable TV channel.

That’s why we like the approach of ShopCity, which lets hyperlocal sites, chambers of commerce, local publishers and local governments use a platform that provide enhanced listings, transactions and social media tools for SMBs.

Two former Gatehouse digital staff, in particular, have taken out new ShopCity sites: Emily Lowry, who launched The Magic City Post ‘s ShopBirmingham,after working on ShopBuffalo last year; and well known journalism blogger and executive Howard Owens, who today launched ShopBatavia. The sites make me want to go out and use ShopCity to launch a shopping site for my own town.

The sites are new for ShopCity, which now has 30 local sites around the U.S. and Canada. The company has also launched ShopLocally, which is kind of a networked “greatest hits site” comprising the best of ShopCity sites.

Owens notes in today’s The Batavian that “ShopBatavia.com isn’t just another ‘hope they find us’ business directory with nothing more than a picture and a few words about your business.

“With ShopBatavia.com, merchants can actually sell online, offer specials, discounts, coupons, daily deals, product information, set up newsletters for direct marketing, integrate with Facebook and Twitter, answer customer questions and do it all in an environment that is professional and backed by same-day phone support,” says Owens.

Owens adds that “ShopBatavia.com is bolstered by the marketing power of The Batavian, with its thousands of daily local readers and thousands of Facebook fans.”

Amazon’s a sleeper bet to really shake up local commerce . But what does that look like? For sure, we see the pieces being assembled…the focus on Amazon Stores, the $175 million Living Social Investment, the Kindle Fire rollout, the expansion of Amazon Prime to include access to a range of content, the build up of Amazon Transactions. But it isn’t totally clear – perhaps not to Amazon, either.

To us, we’re looking at local being organically integrated into general commerce, rather than ghettoized. But we keep returning to Living Social. And to the Prime membership model. Today, we see it more clearly.

As he was checking out a Blue Nile Cyber Monday deal on Living Social, Washington Business Journal reporter Bill Flook uncovered a possible new direction: a premium Living Social membership model being branded as “Living Social Plus Beta.”

For $20 a month, members would receive $25 in Deal Bucks and for the first time, a chance to break into some expired deals (“priority access to closed deals”).

For Living Social, the membership opportunity is clear: they can guarantee at least one purchase a month from well- heeled consumers (Blue Nile is a diamond site). Deal a day participants currently purchase about four deals a year. Moreover, while they are giving away $5 of credits a month, the actual cost is much less since Living Social only needs to come up with the commission amount before the discount.

What’s interesting to us is that Living Social might be going in this direction, and that it’s points and Rewards program that it recently announced with Next Jump isn’t part of the equation. Maybe they are hedging their bets.

Will premium memberships be the new “first class” for consumers, and especially, local consumers? If that’s the case, it has great ramifications for sites not only like Living Social and the deals space, but Amazon, and Angie’s List, too. We’ll see how much it catches on in 2012.

ILM West is shaping up to be one of the great ones. Taking place Dec. 12-14 in downtown San Francisco, ILM West really reflects a sea change in local marketing from advertising to the new hybrid model of advertising and commerce (i.e. prepaid deals, reputation management, mobile app sales etc.).

We’ve made some big additions since our last update, starting with Google and Facebook. These add to the existing lineup, including our “rock stars” (Clear Channel CEO and industry legend Bob Pittman AllThingsD’s Kara Swisher, Media News Group/Journal Register CEO John Paton and Deseret Media and former Harvard Business School Professor Clark Gilbert), and major sessions on deals, offers, verticals and the whole spectrum of local trends.

We will pursue three unique angles on Google at ILM West:

1- The local efforts, under Marissa Mayer’s local team. Jeff Aguero, head of local marketing, will present on everything local, from Zagat, to Google Places, to the Big G’s new “Get Online” program for SMBs. These strategies have really developed since this summer.

2- The global reseller effort. Global Channels head Todd Rowe will engage in an in-depth conversation with BIA/Kelsey President Neal Polachek on all his efforts.

3- Google Mobile. Mobile and Local Search exec Surojit Chatterjee will provide insights into this critical area for Google as part of our All SoLoMo morning on Day 3.

We’re also going deep with Facebook at ILM West. Facebook’s new local leader Matt Idema is our afternoon keynote on Day 2, with a lot of new details and a progress report on the local and vertical strategies. On Day 1, we are also taking a special look at working with Facebook’s platform with execs from Trada, Oodle and Kenshoo Local/Social weighing in. Eager but not sure how to play with Facebook? You will be when ILM West is done.

The SoLoMo event on Day 3 itself is going to be quite the cornerstone for ILM West. Curated by the research teams from our Social Local Media and Mobile Local Media programs, SoLoMo features top line data; and indepth and fresh looks at SoLoMo implementations from leaders at Google, AT&T Interactive, Zaarly, PayPal, XAd, JiWire and AppStack (Steve Espinosa’s new project.)

You can see the full agenda here. And register here.

Remember: We are making a donation to the SF/Marin County Food Bank for all registrations that come in by Thanksgiving.

A big chunk of the newspaper industry has banded together to adopt Find n Save, a shopping platform featuring a single place to review deals, product inventory, weekly specials, “cents off” grocery deals and local ads.

Participating newspaper companies include many of the companies participating in the Yahoo search and national advertising consortia and the Zillow real estate consortia. They include Gannett, Media News Group, McClatchy, Advance, Hearst, Cox, A.H. Belo and The Washington Post. More than 200 newspaper titles are involved in all.

Find n Save was launched last year by Travidia, a newspaper services vendor that has specialized in digital conversion of circular ads as well as directory solutions. The consortia is purchasing Travidia as part of the deal.

The conversion of the multi-billion dollar newspaper circular business to the digital age has been a tough one, although potentially lucrative. Chains such as Radio Shack, Target, Frys Electronics and others have increasingly looked to spend outside of traditional newspaper channels as print circulation has declined.

Moreover, the way that shoppers look for information has dramatically changed due to the ability to search for specific products and deals on the Internet. Most online circular solutions have not been fully searchable.

Early versions of Find n Save have tried to meet these changes by offering a one stop, fully-searchable solution. The concept has been especially championed by McClatchy. As of today, the initial launch of Find n Save is live in 19 markets, and will be in 21 markets by the end of the year.

For the newspaper industry, the question has been whether to get behind Find n Save, or Gannett-owned ShopLocal, which has many national accounts and has been similarly evolving. Gannett’s participation in Find n Save suggests they will seek to form a complementary solution. Another shopping solution that may prove complementary is AP’s iCircular product, which is oriented towards mobile users and may be seen as experimental.

To lead the new company, Find n Save has recruited former Yahoo Consortium leader Chris Tippie, who tells BIA/Kelsey that the advantage of the broad consortium is that it provides a truly national footprint, which is vital for circular advertisers. “Our goal is to have a Find n Save presence in every market in the U.S. For us, it is imperative to provide consistent delivery, uniform measurement and ease of engagement across all of our affiliate markets,” he says.”National retailers have been asking for this for some time.”

Tippie also says that it is much better that a one stop shopping approach be offered, even though deals, grocery coupons, inventory and national product ads might seem like unrelated items that newspapers just happen to sell.

“It is absolutely critical,” says Tippie. “Local newspapers provide terrific service to local retailers, and they provide a variety of different products. These are revealed to local shoppers in a variety of mechanisms. This provides a single interface that is searchable and optimized.”

Tippie also emphasizes that local affiliates have a lot of leeway around such issues as sourcing local deals. “We don’t provide a daily deals product,” he notes. “We just make it better” by aggregating and optimizing them. Sacramento’s Find n Save, for instance, had been providing both Groupon deals and local newspaper deals.

One part of the shopping solution that will require more work to be fully integrated is a local retailer directory. Some newspapers are earning revenue from enhanced directory listings, including one developed by Travidia that will continue to be sold by Find n Save. These will likely to continue to be developed locally by each company.

Whether Find n Save is ultimately successful depends on a number of factors. The biggest is whether the national retailers will adopt the platform and switch their circular budgets to it. Many have been developing their own capabilities.

For McClatchy Digital head Chris Hendricks, Find n Save represents a new beginning for newspapers. “It is pushing what we want to do as an industry,” he told us. “We are working together to develop solutions that work for advertisers and consumers.” Hendricks envisions future iterations, for instance, in the tablet space.

Black Friday and Cyber Monday for holiday shopping are bed rocks of the nation’s economy. Where do deals fit in?

As Bloomberg reports, Yipit Data forecasts that U.S. consumers will spend $80 million to $100 Million on daily deals gifts between Thanksgiving and Christmas, up from $15-$20 Million in 2010. A separate poll of 10,000 Yipit users found that more than 90 percent said they were likely to buy a daily deal as a gift this year.
Our gut also tells us that deals will be attractive for the holidays.

• They are fun and not stigmatized as “cheap”
• National brands account for roughly 15 percent for major sites, and will have some very attractive deals set for the major destination sites
• Social deals that give a free deal for three or more buys lend themselves naturally to the holidays.

The sites seem like they are prepared. As the Bloomberg article notes, Groupon expanded its Grouponicus holiday site to more than 40 cities, up from 20 last year. It also added more deals involving unique experiences, including tickets to Ellen DeGeneres and a half-price helicopter ride in New Jersey.

Deals are prominently featured at ILM West Dec. 12-14 in San Francisco, with cutting edge data from BIA/Kelsey and Local Offer Network; major media companies such as CBS and Belo talking about their experiences; and next wave providers including Thrillist and Scoutmob. Register here.