Merchant Exchange Tries Exclusivity as Hook in Daily Deals

5/31/12Follow @jpruth

While the luster fades on some daily deals and rewards programs, a New York-based startup is trying to set itself apart from rivals in this market by essentially being less social. Merchant Exchange is a website that connects consumers to deals. But what makes it different is the merchants do not broadcast the same deals to everyone. Think of it as a more selective system, where merchants dole out different offers based on how frequently each patron makes purchases with them.

Co-founder Michael Tolkin says one-year-old Merchant Exchange is now raising its first outside funding, which he wants to close at about $1 million. More than 75 premium brands and merchants, including Alton Lane tailored apparel, Longchamp handbags, and Regent luxury cruises, use the platform, which is divided into shopping, dining, entertainment, and travel categories. Tolkin says Merchant Exchange is also in talks with private jet companies and high-end merchants, who are considering incentives aimed at affluent clientele.

The platform’s emphasis on premium brands, Tolkin says, helps bring deals to what he calls an underserved segment. “Luxury brands are very wary of participating in the noisy social ecosystem,” he says. A more discrete approach to reaching customers, he says, may help maintain the image of such brands.

Merchant Exchange does not handle deals or any purchases itself. Rather, the platform gives consumers a place to sign up for offers from multiple merchants who largely offer premium and luxury items. “The idea was to digitize data and make it much easier for the consumer to manage his or her commercial relationships with … Next Page »

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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