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Daily Deals

DAILY DEALS A Lasting Sale or Just the Latest Craze? Every shopper loves a good deal, which is why the popularity of daily deal sites has skyrocketed in the past several years. But for all the excitement, experts are divided on whether daily deals sites are here to stay or just the latest flash in the Internet's pan. Today, we explore the current state of daily deals websites, the rise of their popularity, and what the future might hold. How Daily Deals Affect The Merchant 50% OFF 50% 25% Typically, Groupon (and similar sites) discounts merchandise at around 50%. Groupon then keeps 50% of each sale it generates. In the end, the merchant keeps just 25% of 3 what he would normally receive. Groupon claims its value to merchants is in exposing them to new customers. However, this benefit may not be realistic: A recent study conducted by Rice University surveyed 324 small businesses that have part- nered with daily deals sites. Although more than half of these businesses made money, 26.6% lost 15% 25% 32% 66% money. Studies show that only For 32% of merchants, Less than 15% of redeemers return to All told, promotions on Groupon are only profitable for about 66% of merchants. Broke Even 25% of redeemers 17.9% Groupon promotions were unprofitable. purchase products outside of the Groupon promotion. buy the product or service at full price. Made Money Lost Money 26.6% 55.5% The Types of Retailers that have the hardest time with Daily Deals Salons and Spas Bars and Restaurants 53% earn profit 43% earn profit The New Generation of Daily Deals Despite concerns from some merchants, consumer demand for bargains has never been higher. As daily deals websites proliferate, merchants face a tougher choice on where to promote their products and services. The tendency is to go with the biggest, most well known company-Groupon- but is that best for all merchants? The average Groupon buyer is a 30-50 year old man or woman, with a college education, making around $50,000/year. Merchants that cater to unique audiences could have a challenging time creating repeat buyers from the Groupon userbase and producing a profitable campaign. From 2009 to 2011, There are currently over searches on Google for daily deals have increased 448% 448% 500 90% of these sites are in fewer than 10 markets. 20% focus on just one market daily deal sites in America Google The Rise of Audience-Targeted Daily Deals Sites Daily Deal sites differ in many ways- strategy, audience, and revenue. The two largest players in the daily deals arena are Groupon and LivingSocial. While Groupon has more users and generates more revenue, LivingSocial has a larger presence in metro areas. Smaller daily deal sites are focusing on different strategies, such as building a niche audience by location and interest. TIPPR HOME RUN SCOUT mob GROUPON Ivingsocial SocialBuy Life booker savored bloomspot 8coupons Monthly Unique 29,171,931 Visitors 4,314,525 ,720 282,440 361,420 8,161 32,618 939,422 58,223 41,934 Number of Applicable U.S. Cities 182 301 122 28 35 20 10 11 23 Geo- Geo- Geo- Geo- Targeted Daily Deals Daily Deals Daily Deals Daily Deals Daily Deals Daily Deals Geo- Geo- Geo- Targeted Daily Deals Geo- Geo- Geo- Targeted Restaurant Deals Targeted Luxury Deals Targeted Lifestyle Deals Type of Site Targeted Targeted Targeted Targeted Targeted Retailer gets everything, 40-60 (for No split - retailer pays $8.88/day to post deals/coupons Retailer pays anything that scoutmob $4 for every customer Split (Deals Site-Retailer) unpublished customer pays Savored $10 takes an 50-50 40-60 40-60 40-60 30-70 appointment, their commis- sion is 20%) for the reservation and the coupon Audience-targeted daily deal sites could benefit traditional retailers. However, until these sites gain a stronger foothold in more metropolitan areas, Groupon and LivingSocial remain the only options for many retailers. Will Groupon Remain the Leader of the Deals? The young daily deal market space is ripe with competition. Of all the 500+ sites, just two-Groupon and LivingSocial-control 90% of the total daily deals traffic Currently, the biggest player in the space is Groupon. In 2010, the site saw a 650% rise in popularity: 70% of the inventory is controlled Unique visits to Groupon: by the top 10 players. 90% 40% is controlled by the top two: Groupon and Living Social. GROUPON December 2009 December 2010 2 million 15.6 million Ivingsocial Sources: | | | | | | | G+

Daily Deals

shared by ColumnFive on Aug 09
Every shopper loves a good deal, which is why the popularity of daily deal sites has skyrocketed in the past several years. But for all the excitement, experts are divided on whether daily deal sites ...


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