Daily deal business consolidation begins with BuyWithMe

The number of daily deal players out there is starting to decrease.

Considering the overwhelming number of daily and instant deal sites out there at the moment, it would be very easy to speculate that sector is in the midst of a bubble. Is that bubble starting to burst?

Answer: possibly. A consolidation in the number of such businesses is starting today as Gilt Groupe has bought out BuyWithMe, effective Tuesday, November 1.

BetaBeat reports that what was once the third largest player in this field behind Groupon and LivingSocial this year, remaining sales staff (which is probably a small party considering recent layoffs and major salary cuts) will join the Gilt team.

Gilt Groupe is probably best known for its flash sales on designer products as well as its insider travel deals business Jetsetter, but the New York-based company also dabbled in location-relevant deals via Gilt City. Thus, it is most likely that BuyWithMe will be pumped into Gilt City and beef the repertoire of features and discounts available there.

Nevertheless, such a play potentially represents a larger shift at work here. Bigger players with more money and more of a realistic, long-term game plan like Gilt, or even Google and eBay (See: Where purchase), will be able to sustain a business in the daily deal sector much longer than the sea of smaller deal providers out there.

Amazon Local and now Google Offers might be doing work in helping some of these sites, but it will get to a point where consumers want fewer options and ignore anything that doesn't come from more familiar names and even those that have built out an ecosystem encompassing deals.