Following a bumpy ride with daily deal sites, some retailers are questioning the value of the strategy. A small percentage (15%) of U.S. consumers over the age of 12 are registered users of at least one daily deals service, such as Groupon or LivingSocial, according to a recent Edison Research study.
Despite the low number of overall users, many of the daily deal shoppers (62%) report that they have increased or maintained their daily deal usage over time. The study, titled: Report On Daily Deals, indicated that these deals can help retailers drive new business. Nearly a quarter (23%) of consumers surveyed said they have tried businesses or services for the first time because of a deal and continued to visit the business without it.
For small merchants who have suffered the “initial daily deal frenzy, many received so much interest in their deals that they could not handle the demand. Additionally, as reported, many of the initial purchases did not result in repeat customers, so it was a lose-lose [situation],” noted Debbie Hauss, Editor-in-Chief at Retail TouchPoints, in a recent RetailWire blog post.
“I think there will be a shake-out in the daily deal space,” Hauss added. “Some larger retailers are now finding ways to create their own deals and offers and are skipping the third-party partner. The daily deal companies that come out on top will figure out how to create offers that work for both large and small retailers. They also may need to do a better job helping to market the participating retailers in order to encourage repeat shopping.”
What Retailers Can Learn From Groupon
During the Thanksgiving holiday shopping weekend, Groupon probed the third annual Grouponicus event — touted as an “ancient wintertime celebration” by Groupon — and announced the company had experienced high purchase rates on Groupon.com and unanticipated Black Friday transactions via Groupon Mobile services and Groupon Goods.
Notable trends driving this year’s Grouponicus include:
Local gifts are in high demand;
More consumers are using their mobile devices to complete transactions; and
Early best sellers indicate thoughtful and stylish gifts are at the top of shoppers’ lists this year.
Grouponicus is a seven-week event which began on November 14, 2012. In order to explain the perceived origin of the event, Groupon invites shoppers to “explore the history of Grouponicus, featuring the beloved story of Groupo the Deal Bird and his colorful new friends. Each year, Groupo leaves his kingdom of Winterland to fly to the homes of true believers, leaving stacks of Groupons in their ovens to reward them for adhering to the Eight Tenets of Grouponicus.”