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The Daily Deals Space:
                                          Groupon and Amazon

Nick Timmons
Student – UIUC MS-Technology Management
Daily Deals Industry - History
             • The Concept of Online Deal
               Platforms first takes off in 2001, with
               the founding of Vente-privee.com

             • Other “Flash Sales” sites, like
               Woot.com and Gilt Groupe, follow
               soon thereafter

             • Eventually, flash sales evolve to
               incorporate the concept of group
               buying into daily deals

             • In steps Groupon in November 2008
The Daily Deals Industry (DDI)
   • "There's never been anything--
      radio, TV, newspaper, whatever--that could generate
      small business sales so quickly. We want to do for
      local e-commerce what Amazon did for normal
      consumer goods."
• According to a study       – Andrew Mason, CEO, Groupon
  released by BIA/Kelsey in
  Sep „11, gross revenues are
  projected to grow from a
  current $873 million to $4.2
  billion by 2015 (a forecast
  revised upwards 64% from a
  BIA study in Mar „11).
Overview -
• Founded in Chicago November 2008

• Name = portmanteau of “Group Coupon”

• Current revenue run rate of $100M per month

• Operates in >500 markets in 44 countries

• The fastest growing company, by revenue, ever

• Valuation: $7.67b, and plummeting (most recent earnings pop
  notwithstanding); down from Nov. IPO price of $15b

• No Syndication; push deals via massive sales force and good copy
Overview -
• Launched in June 2011 in Boise, Idaho, ―a city that
  embraces fun,‖ to signify the kind of ―adventurous spirit
  [they] want customers to experience everyday.”

                                 • Began with an evolved
                                   aggregator model, in order to
                                   leverage its $175m investment
                                   in Living Social.

                                 • Beyond their entry
                                   play, AmazonLocal is moving
                                   towards personalization, where
                                   they can really leverage their
                                   existing platform of 164m
                                   subscribers.
The DDI – Porter‟s Five Forces
                                                                       + Attractive profits, requires little technology
                                                                       + Low differentiation in offerings
                                               Threat of               + Extremely easy model to copycat
                                                 New                   - Larger scale operations are most successful
                                                                       - Lack of a syndication model
                                                   Entrants
     - Low to no switching cost                    -HIGH-
     - Similar products/services                                                          - DD sites depends on vendors
                                                                      Bargaining
                                                                       power of           - Low switching cost
                                                                                          - Discount erodes brain value
                   Bargaining                                          supplier           + Gain access to huge market
                    power of                       Rivalry                                + Drive traffic and awareness
                     buyer                                            -MEDIUM-
                                                   -HIGH-                                 + Low financial risk
                     -HIGH-



                                                         Threat of                    - Over 400 clones in U.S
                                                                                      - No consumer loyalty
                                                        Substitutes                   - Low differentiation
- New services using mobile and social platforms
                                                                                      - Easy to imitate
+ Disrupted printed ads, radio deal                          -LOW-                    + No exit cost
Critical Factors for Success in DDI
• LTV : CAC
  – Life Time customer Value
  – Customer Acquisition Cost
  – 3:1 is optimal target ratio
     • According to HBS Professor
         Tom Eisenmann

• “Groupon Anxiety”
  – Customers get SO excited to view new deals each day
  – Must be careful in making future usage estimates based
    on initial high usage rates; essentially overinflating LTV
    and causing too much expenditure on customer
    acquisition.
Critical Factors for Success in DDI
• New channel development
  – Social Networks
    • People want to buy what their friends are buying and
      want to leverage the same deals people in their
      network are taking advantage of.
    • P2P/Viral Marketing
    • Peer pressure
       –   Deal threshold generates larger impulses to engage in
           multiple buys, and also motivates customers to find their
           friend to purchase the offer together.
    • Easier to be accepted
       –   Message from known source (friend) has larger chance to
           be read.
Critical Factors for Success in DDI
• New channel development
  – Mobile
    • Given the group buying nature of the daily deals,
       and the fact that they need to reach a “tipping
       point”, minimizing transactional frictions is a
       must. Being able to buy whenever, on the go, is
       thus crucial.
    • This is THE crucial future customer touchpoint.
       One only needs to look at the heart of the
       facebook IPO situation. Financial growth models
       don‟t work as well when “socially oriented”
       businesses” (in the Web 2.0 sense) can‟t monetize
       their user base on a mobile basis.
Critical Factors for Success in DDI
• Create centralized portal for end-users and
  vendors
  – Customer-Centric View: Strong bargaining power
    w.r.t. suppliers means Group purchasing may
    generate larger amount of discounts
  – Vendor-Centric View: Can reach more end-users
    and thus improve advertising cost performance

      ―When asked, 87% of people said they would
   increase their use of daily deals if they could find
     only deals that interest them all in one place.‖
                   • Lisa Gurry, Bing Deals
Critical Factors for Success in DDI
• Enabling Impulse Purchasing
  • Uses time limitation to cajole customers into
    making decisions in the moment
  • Deal thresholds also improve impulsivity and
    encourage multiple purchases
  • Customers can not predict what the next
    product/service will be
    – Creates a palatable sense of excitement about what
      could or should come next!
Critical Factors for Success in DDI
• Enabling Impulse Purchasing

DDI’s Holy Grail = “e-tailing locally”
• A key component to internet retailing and e-
  commerce is the necessity of waiting between
  purchase and consumption.
• Daily Deals represent a way to marry the efficiencies
  of the web to local commerce, to purchases driven by
  impulse that can be utilized right now.
Success factors of Groupon
• First Mover Advantages
  – Developed a significant lead in securing
    customer loyalties at a time when purchasing
    habits for local are up for grabs.
    • As with, say, Target using statistics to perform
      behavorial research to target pregnancies earlier, at a
      time when purchasing habits are similarly up for grabs
Success factors of Groupon
• First Mover Advantages
  – Earned, and still earns, above avg gross returns
     • Harvard Working Paper - ―We are struck by the large
       fees that leading discount voucher services
       charge…large fees relative to Groupon’s marginal
       costs of voucher provision.‖
  – Scaled as quick anyone ever has
     • Given the powder keg that is local e-commerce, the first
       to discover it was always going to grow fast.
  – Full attention on single business
     • This leads to “extras” like the importance of copy as
       small competitive differentiators.
How Groupon Defends vs. DDI
       Competition
• Vendor lock-in
  – Groupon signs exclusive contract with vendors
• Buffer clause in the contract
  – Prevent vendors from signing another contract
    with its competitors for N weeks/months
• Human factor (Sales Forces)
  – The furthest on the learning curve
• Outbidding anyone else on paid acquisition
Groupon - Securing Porter‟s Five
            Forces
                  Customer Acquisition Cost drive up
                          Vendor Lock-In




 Buffer clause



                 Strong Sales Force
Success factors of AmazonLocal
• Second Mover Advantages
  – Benefits greatly from getting involved 2.5
    years after industry inception, because
    demand is far less uncertain
  – Market Research to further serve customer
    needs can be more readily implemented
  – Learn from First Mover mistakes, like
    Groupon‟s LTV-CAC miscalculations, or its
    refunding policy problems
Success factors of AmazonLocal
• Large (and fast) logistics across the country
  (1-2 day to door delivery)
• Broad variants of business
  – Does not have to rely on single service.
  – More tolerance for specific industry fluctuations.
• Existing E-tailing platform
  – Experience building an internet commerce
    platform is immeasurably valuable when creating
    a local e-commerce platform
Examples of Success - Groupon
                          Groupon
  Provides 50% discount chance   Provides chance for ads



      End Customer                                  Vendors




 Groupon holds the largest the daily deal record.

 $15.6m for Nordstrom Rack
Examples of Success - AmazonLocal
          and Living Social
                           Amazon
                 Invested $175m   Develop its own platform



 Living Social + Amazon:                        AmazonLocal:
        Jan 19, 2011                                 One year later

• $20 Amazon Gift cards for $10       •   Amazon $5 for $10 Gift card
  • 1.1m deal (cards) sold                 • Fastest selling deal in the
                                             industry‟s history
  • $11m in Gross revenue
                                           • 1m deal (cards) sold in 17 hours
  • Year‟s most successful                 • $5m in Gross revenue (5x normal
     Living Social deal                      weekly operational revenue)
The Future of Daily Deals
• Key Distinction between end users and
  merchants.

End Users want value added services that help
them satisfy their behavioral drives NOW. They
want to interact seemlessly and are ever
increasingly mobile. And “saving 50% or more
everyday” binds the purchasing decision together.
The Future of Daily Deals
• Merchants
 – Harvard Working Paper - ―Our model reveals that a
   discount voucher service is more likely to be profitable for
   affiliated firms, all else equal, if customers using that service
   have valuations substantially different from those of other
   customers…the difficulty as the voucher service grows: As
   more consumers use vouchers, voucher-users necessarily
   come to resemble average consumers so the use of a voucher
   comes to convey less information about a consumer's
   valuation. Thus, as voucher services grow, their
   affiliates will have to rely on voucher advertising
   rather than voucher price discrimination. Current
   voucher services' profits and recent growth may therefore
   not be good predictors of those services' future values.‖
The Future of Daily Deals
• Merchants
 – Purveyors of discount vouchers should focus
   on forced/advertised awareness
   • Merchants see value in firms like AmazonLocal
     and Groupon because they can make money from
     sales, yes, but ALSO because people locally that
     don‟t know about those merchants might do so
     through these deals. The value of the latter
     outweighs that of the former for the vendor as deal
     penetration grows.
   =Combating Vendor Fatigue
      – (more later)
The Future of Daily Deals

• Serving Merchants + End Users
   = Local e-commerce platform
 – Doing this effectively implies larger levels of
   syndication, meaning elevated profitability
   for the firms that unlock this basic algorithm.
The Future - Groupon
• Andrew Mason, in a
  May 8, 2012 letter to
  shareholders:
   ―things have been
   rocky‖ (surely just
   look at their share
   price!)…"Although
   there are risks in
   moving too
   fast, companies often “The next step for
   don't survive long    Groupon is to become a
   enough to apologize
   for moving too slow." platform for local
                          commerce.”
                            -Rob Solomon, CFO,
                            Groupon
The Future - Groupon
• MUST combat Vendor Fatigue
  – Without vendors, there are no deals. With no deals, there is
    no Groupon.
  – Study from Rice University: 32% of Groupon vendors did
    not make money through their Groupon offering, and 42%
    would not do another daily deal
     • Applying the logic from the HBS paper, it might make more
       sense sometimes to induce vendors to offer deals based on the
       advertising value of leveraging e-platforms for customer
       acquisition, as opposed to their outright profitability.
     • If you market to merchants based on promises of great near
       term profitability, expectations will cause dissatisfation like we
       see above. Customers don‟t make money in the direct sense from
       a Google Ads Campaign. Its an expense that provides incredible
       visibility and engagement. So, too, can offering a discount
       voucher. This seems undercommunicated.
Groupon‟s differentiation
• Groupon Now
  – Different product offerings with mobile technology and GPS.
    Real-time daily deal flexiblility for businesses.
  – Enabling mobile, repeat, impulse purchases
  – Customers in North America who use mobile spend
    50% more than Grouponers who do not.
• Groupon Reward
  – Loyalty program to increase customer‟s switching costs
  – Encourage repurchase at the same store to unlock more deals
• Groupon Goods
  – e-Commerce business channel that will compete with Amazon,
    Wal-Mart, BestBuy, etc.
  – Experimental period
The Future - AmazonLocal
• ―There’s lots of competitors in this space, and we all want attention
  from the merchants. By far and away, they [merchants] answer
  the phone and want to hear what we have to say. We have
  relationships with millions of merchants around the world, and 164
  million customers worldwide. We know how to work with
  merchants + connect with customers — it’s unique to Amazon.com.‖
                       – Mark Eamer, Product Director, AmazonLocal

In other words, again, the platform is the thing. Groupon might be the
leaders in the space, and competitors like Google Offers might bring
interesting technologies to bear in the future. But nobody has the
experience in creating a commerce platform like Amazon.
The Future - AmazonLocal
– ―It’s an interesting thing to think about — the
  intersection of consumer products and services that
  are fulfilled by local merchants. There are some
  things that are logical that I believe we will discover
  that we would never have really thought about. This
  part is very new to us...‖
              • Mike George, VP, AmazonLocal

       New, but not uncharted, as he continues…
– “…We are reasonably new to the deals space, but we
  aren’t new to the personalization experience. This
  [recommendation technology] is a logical extension
  of a competency.‖
The Future - AmazonLocal
• Leverage Amazon‟s e-commerce platform
  experience
   – Existing experience in building a platform via integrating
     payment systems, continuing to bringthe ethic of “being the
     most customer-centric company on Earth” to the table,
     crowdsourcing reviews, using information to generate AI
     recommendations (deal preferences initiative), web services,
     wide offering of everything A-Z (this time, locally), etc => It’s a
     bit of a new venue for Amazon, but not a new game.

• Amazon‟s MAJOR goal for 2012, and beyond =
  significantly refine its targeting capabilities in
  order to deliver the right deal to the right
  person at the right time.
In the End…
• …the particular genius of the daily deals
  industry is in taking $ spent on the Web,
  and marrying that to fundamentally local
  consumption.
  – The firms that continue to ennoble this
    concept on into the future will win. And there
    are enormous future profits on offer to victors.

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The Daily Deals Industry: Amazon and Groupon

  • 1. The Daily Deals Space: Groupon and Amazon Nick Timmons Student – UIUC MS-Technology Management
  • 2. Daily Deals Industry - History • The Concept of Online Deal Platforms first takes off in 2001, with the founding of Vente-privee.com • Other “Flash Sales” sites, like Woot.com and Gilt Groupe, follow soon thereafter • Eventually, flash sales evolve to incorporate the concept of group buying into daily deals • In steps Groupon in November 2008
  • 3. The Daily Deals Industry (DDI) • "There's never been anything-- radio, TV, newspaper, whatever--that could generate small business sales so quickly. We want to do for local e-commerce what Amazon did for normal consumer goods." • According to a study – Andrew Mason, CEO, Groupon released by BIA/Kelsey in Sep „11, gross revenues are projected to grow from a current $873 million to $4.2 billion by 2015 (a forecast revised upwards 64% from a BIA study in Mar „11).
  • 4. Overview - • Founded in Chicago November 2008 • Name = portmanteau of “Group Coupon” • Current revenue run rate of $100M per month • Operates in >500 markets in 44 countries • The fastest growing company, by revenue, ever • Valuation: $7.67b, and plummeting (most recent earnings pop notwithstanding); down from Nov. IPO price of $15b • No Syndication; push deals via massive sales force and good copy
  • 5. Overview - • Launched in June 2011 in Boise, Idaho, ―a city that embraces fun,‖ to signify the kind of ―adventurous spirit [they] want customers to experience everyday.” • Began with an evolved aggregator model, in order to leverage its $175m investment in Living Social. • Beyond their entry play, AmazonLocal is moving towards personalization, where they can really leverage their existing platform of 164m subscribers.
  • 6. The DDI – Porter‟s Five Forces + Attractive profits, requires little technology + Low differentiation in offerings Threat of + Extremely easy model to copycat New - Larger scale operations are most successful - Lack of a syndication model Entrants - Low to no switching cost -HIGH- - Similar products/services - DD sites depends on vendors Bargaining power of - Low switching cost - Discount erodes brain value Bargaining supplier + Gain access to huge market power of Rivalry + Drive traffic and awareness buyer -MEDIUM- -HIGH- + Low financial risk -HIGH- Threat of - Over 400 clones in U.S - No consumer loyalty Substitutes - Low differentiation - New services using mobile and social platforms - Easy to imitate + Disrupted printed ads, radio deal -LOW- + No exit cost
  • 7. Critical Factors for Success in DDI • LTV : CAC – Life Time customer Value – Customer Acquisition Cost – 3:1 is optimal target ratio • According to HBS Professor Tom Eisenmann • “Groupon Anxiety” – Customers get SO excited to view new deals each day – Must be careful in making future usage estimates based on initial high usage rates; essentially overinflating LTV and causing too much expenditure on customer acquisition.
  • 8. Critical Factors for Success in DDI • New channel development – Social Networks • People want to buy what their friends are buying and want to leverage the same deals people in their network are taking advantage of. • P2P/Viral Marketing • Peer pressure – Deal threshold generates larger impulses to engage in multiple buys, and also motivates customers to find their friend to purchase the offer together. • Easier to be accepted – Message from known source (friend) has larger chance to be read.
  • 9. Critical Factors for Success in DDI • New channel development – Mobile • Given the group buying nature of the daily deals, and the fact that they need to reach a “tipping point”, minimizing transactional frictions is a must. Being able to buy whenever, on the go, is thus crucial. • This is THE crucial future customer touchpoint. One only needs to look at the heart of the facebook IPO situation. Financial growth models don‟t work as well when “socially oriented” businesses” (in the Web 2.0 sense) can‟t monetize their user base on a mobile basis.
  • 10. Critical Factors for Success in DDI • Create centralized portal for end-users and vendors – Customer-Centric View: Strong bargaining power w.r.t. suppliers means Group purchasing may generate larger amount of discounts – Vendor-Centric View: Can reach more end-users and thus improve advertising cost performance ―When asked, 87% of people said they would increase their use of daily deals if they could find only deals that interest them all in one place.‖ • Lisa Gurry, Bing Deals
  • 11. Critical Factors for Success in DDI • Enabling Impulse Purchasing • Uses time limitation to cajole customers into making decisions in the moment • Deal thresholds also improve impulsivity and encourage multiple purchases • Customers can not predict what the next product/service will be – Creates a palatable sense of excitement about what could or should come next!
  • 12. Critical Factors for Success in DDI • Enabling Impulse Purchasing DDI’s Holy Grail = “e-tailing locally” • A key component to internet retailing and e- commerce is the necessity of waiting between purchase and consumption. • Daily Deals represent a way to marry the efficiencies of the web to local commerce, to purchases driven by impulse that can be utilized right now.
  • 13. Success factors of Groupon • First Mover Advantages – Developed a significant lead in securing customer loyalties at a time when purchasing habits for local are up for grabs. • As with, say, Target using statistics to perform behavorial research to target pregnancies earlier, at a time when purchasing habits are similarly up for grabs
  • 14. Success factors of Groupon • First Mover Advantages – Earned, and still earns, above avg gross returns • Harvard Working Paper - ―We are struck by the large fees that leading discount voucher services charge…large fees relative to Groupon’s marginal costs of voucher provision.‖ – Scaled as quick anyone ever has • Given the powder keg that is local e-commerce, the first to discover it was always going to grow fast. – Full attention on single business • This leads to “extras” like the importance of copy as small competitive differentiators.
  • 15. How Groupon Defends vs. DDI Competition • Vendor lock-in – Groupon signs exclusive contract with vendors • Buffer clause in the contract – Prevent vendors from signing another contract with its competitors for N weeks/months • Human factor (Sales Forces) – The furthest on the learning curve • Outbidding anyone else on paid acquisition
  • 16. Groupon - Securing Porter‟s Five Forces Customer Acquisition Cost drive up Vendor Lock-In Buffer clause Strong Sales Force
  • 17. Success factors of AmazonLocal • Second Mover Advantages – Benefits greatly from getting involved 2.5 years after industry inception, because demand is far less uncertain – Market Research to further serve customer needs can be more readily implemented – Learn from First Mover mistakes, like Groupon‟s LTV-CAC miscalculations, or its refunding policy problems
  • 18. Success factors of AmazonLocal • Large (and fast) logistics across the country (1-2 day to door delivery) • Broad variants of business – Does not have to rely on single service. – More tolerance for specific industry fluctuations. • Existing E-tailing platform – Experience building an internet commerce platform is immeasurably valuable when creating a local e-commerce platform
  • 19. Examples of Success - Groupon Groupon Provides 50% discount chance Provides chance for ads End Customer Vendors Groupon holds the largest the daily deal record. $15.6m for Nordstrom Rack
  • 20. Examples of Success - AmazonLocal and Living Social Amazon Invested $175m Develop its own platform Living Social + Amazon: AmazonLocal: Jan 19, 2011 One year later • $20 Amazon Gift cards for $10 • Amazon $5 for $10 Gift card • 1.1m deal (cards) sold • Fastest selling deal in the industry‟s history • $11m in Gross revenue • 1m deal (cards) sold in 17 hours • Year‟s most successful • $5m in Gross revenue (5x normal Living Social deal weekly operational revenue)
  • 21. The Future of Daily Deals • Key Distinction between end users and merchants. End Users want value added services that help them satisfy their behavioral drives NOW. They want to interact seemlessly and are ever increasingly mobile. And “saving 50% or more everyday” binds the purchasing decision together.
  • 22. The Future of Daily Deals • Merchants – Harvard Working Paper - ―Our model reveals that a discount voucher service is more likely to be profitable for affiliated firms, all else equal, if customers using that service have valuations substantially different from those of other customers…the difficulty as the voucher service grows: As more consumers use vouchers, voucher-users necessarily come to resemble average consumers so the use of a voucher comes to convey less information about a consumer's valuation. Thus, as voucher services grow, their affiliates will have to rely on voucher advertising rather than voucher price discrimination. Current voucher services' profits and recent growth may therefore not be good predictors of those services' future values.‖
  • 23. The Future of Daily Deals • Merchants – Purveyors of discount vouchers should focus on forced/advertised awareness • Merchants see value in firms like AmazonLocal and Groupon because they can make money from sales, yes, but ALSO because people locally that don‟t know about those merchants might do so through these deals. The value of the latter outweighs that of the former for the vendor as deal penetration grows. =Combating Vendor Fatigue – (more later)
  • 24. The Future of Daily Deals • Serving Merchants + End Users = Local e-commerce platform – Doing this effectively implies larger levels of syndication, meaning elevated profitability for the firms that unlock this basic algorithm.
  • 25. The Future - Groupon • Andrew Mason, in a May 8, 2012 letter to shareholders: ―things have been rocky‖ (surely just look at their share price!)…"Although there are risks in moving too fast, companies often “The next step for don't survive long Groupon is to become a enough to apologize for moving too slow." platform for local commerce.” -Rob Solomon, CFO, Groupon
  • 26. The Future - Groupon • MUST combat Vendor Fatigue – Without vendors, there are no deals. With no deals, there is no Groupon. – Study from Rice University: 32% of Groupon vendors did not make money through their Groupon offering, and 42% would not do another daily deal • Applying the logic from the HBS paper, it might make more sense sometimes to induce vendors to offer deals based on the advertising value of leveraging e-platforms for customer acquisition, as opposed to their outright profitability. • If you market to merchants based on promises of great near term profitability, expectations will cause dissatisfation like we see above. Customers don‟t make money in the direct sense from a Google Ads Campaign. Its an expense that provides incredible visibility and engagement. So, too, can offering a discount voucher. This seems undercommunicated.
  • 27. Groupon‟s differentiation • Groupon Now – Different product offerings with mobile technology and GPS. Real-time daily deal flexiblility for businesses. – Enabling mobile, repeat, impulse purchases – Customers in North America who use mobile spend 50% more than Grouponers who do not. • Groupon Reward – Loyalty program to increase customer‟s switching costs – Encourage repurchase at the same store to unlock more deals • Groupon Goods – e-Commerce business channel that will compete with Amazon, Wal-Mart, BestBuy, etc. – Experimental period
  • 28. The Future - AmazonLocal • ―There’s lots of competitors in this space, and we all want attention from the merchants. By far and away, they [merchants] answer the phone and want to hear what we have to say. We have relationships with millions of merchants around the world, and 164 million customers worldwide. We know how to work with merchants + connect with customers — it’s unique to Amazon.com.‖ – Mark Eamer, Product Director, AmazonLocal In other words, again, the platform is the thing. Groupon might be the leaders in the space, and competitors like Google Offers might bring interesting technologies to bear in the future. But nobody has the experience in creating a commerce platform like Amazon.
  • 29. The Future - AmazonLocal – ―It’s an interesting thing to think about — the intersection of consumer products and services that are fulfilled by local merchants. There are some things that are logical that I believe we will discover that we would never have really thought about. This part is very new to us...‖ • Mike George, VP, AmazonLocal New, but not uncharted, as he continues… – “…We are reasonably new to the deals space, but we aren’t new to the personalization experience. This [recommendation technology] is a logical extension of a competency.‖
  • 30. The Future - AmazonLocal • Leverage Amazon‟s e-commerce platform experience – Existing experience in building a platform via integrating payment systems, continuing to bringthe ethic of “being the most customer-centric company on Earth” to the table, crowdsourcing reviews, using information to generate AI recommendations (deal preferences initiative), web services, wide offering of everything A-Z (this time, locally), etc => It’s a bit of a new venue for Amazon, but not a new game. • Amazon‟s MAJOR goal for 2012, and beyond = significantly refine its targeting capabilities in order to deliver the right deal to the right person at the right time.
  • 31. In the End… • …the particular genius of the daily deals industry is in taking $ spent on the Web, and marrying that to fundamentally local consumption. – The firms that continue to ennoble this concept on into the future will win. And there are enormous future profits on offer to victors.