Daily Deal Fatigue? Not So Fast!

by · April 19, 20125 comments

New research from Edison Research and Arbitron is out today on the daily deal world — Groupon, Living Social, TryItLocal and the like. Tom Webster is actually live casting the data this afternoon at 2:30 ET if you’d like to see it unveiled complete with explanations from the master himself.

Unlike infographics and “research” created for content purposes, Edison and Arbitron are actual market researchers and scientists that put their data through stringent checks and balances to ensure sampling is representative and biases are vetted. For research in the social media and digital marketing world, there are few as trustworthy as these guys.

Some of the research was rather surprising to me. Some nuggets:

  • 15 percent of Americans are signed up for a ‘daily deal’ site or service.
  • Of those signed up, 66 percent are women.
  • 49 percent of those signed up are between the ages of 25 and 44, an age group that only accounts for 31 percent of the U.S. population.
  • 45 percent of daily deals users are from the Southern U.S. That’s eight percent higher than what the South accounts for in U.S. population.
  • Groupon and LivingSocial dwarf competitors in terms of adoption.
  • 62 percent of daily deals users are using them as frequently or more frequently than when they started.
  • 53 percent of users say they tried a business or service for the first time because of the deal. Some 23 percent of users say they continued to visit the business after the initial trial.
  • Deals users are almost twice as likely to follow brands or companies on social media sites.

The rest of the charts and graphs didn’t surprise me much. They matched my assumptions. But all those nuggets aside, the one stat that I think makes this research both important to note, but also important to put in perspective is the first one I noted: 15 percent of Americans are signed up for a ‘daily deal’ site or service.

Certainly, 15 percent of Americans is a significant number of people. But for all the hype and craziness around Groupon, et. al., only 15 percent of people are using them? You can look at the rest of the numbers all you want, but not even two in 10 folks are using these sites.

One can look at the half-full perspective and say there’s tremendous up-side potential in this market. Or you can look at the fact all that hype, buzz, $6 billion “no thank you” to Google, IPO chatter and more, that’s all the deal sites can do?

As of 2009, according to Nielsen, 39 percent of U.S. households clipped coupons. At various points over the last two years you would have thought 99 percent of Americans were Grouponing it. But alas, it’s just 15 percent.

But then you have to look deeper, right? Some 53 percent of users say they tried a business or service for the first time because of the deal sites. Almost one-fourth of users say they’re going back to new businesses to them after the deal sites turned them on to them. And while almost everyone I’ve talked to about daily deal sites in the last year have said they feel like America is dealing with Daily Deal fatigue, 62 percent are using them as much or more than when they started.

The research thwarts some assumptions. It supports others. But the net here is that while adoption seems low to me, there’s no reason to think the daily deals are dwindling, becoming old hat or not effective for businesses to consider.

But that’s my take. What’s yours?

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About Jason Falls

Jason Falls

Jason Falls is the founder and chief instigator for Social Media Explorer's blog and signature Explore events. He is a leading thinker, speaker and strategist in the world of digital marketing and is co-author of two books, No Bullshit Social Media: The All-Business, No-Hype Guide To Social Media Marketing and The Rebel's Guide To Email Marketing. By day, he leads digital strategy for CafePress, one of the world's largest online retailers. His opinions are his, not necessarily theirs. Follow him on Twitter (@JasonFalls).

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  • http://twitter.com/ToddMillett Todd Millett

    Great stats! Thanks. I will take a stab at it coming from a bit different angle. I definitely don’t think daily deals are dwindling. There are daily deal retail websites that sell their own inventory, and then there are websites/services that accumulate the best deals from other websites or local businesses.

    At the company I work for, we buy wholesale inventory (often overstock items), and then resell it with competitive prices. From my perspective, the daily deal model makes sense for this type of business. Most businesses that function in this manner aren’t going to fall into one specific product niche. They buy in bulk and take the best deals they can find on anything they think people will want.

    We currently sell products on Ebay and Amazon, but will be opening our own eCommerce site on our website shortly. Our products range anywhere from motors to purses, and we are certainly not a Sears or Walmart with anything and everything. Without being in one specific product niche, such as apparel or sporting equipment, we have to approach marketing in a different manner. We don’t want people coming to our site and saying, “Who are these guys? What is all this random crap?” With daily deals, people will instantly recognize us as a daily deal website. Instead of always coming to us when they need something, they will hopefully stop by frequently to see what blowout deals we are offering. Then, we hope next time they do need something, they will think to check our site and see if it’s at iBuyz.

    People always want great deals, and daily deal retailers are able to supply them. There will always be a need to sell off excess inventory, and reasons for other types businesses to host daily deals as well. When you put the price tag low enough, people can’t ignore it. Therefore, people will always be excited about daily deals. That is why it works for retailers, as well as services like Groupon and TryItLocal.

  • http://www.FitDawgDeals.com/ Teresa Robinson

    Jason, your article is very encouraging.  I just launched a daily deal site this week in the Raleigh NC area.   My angle on it is to niche and promote local businesses.  I hope to be known as the “go to” site in my niche.    I’m glad to see those numbers and I’m choosing to believe there will be upside potential. Thanks.

  • http://tribalstylemarketing.com/blog TribalStyleMarketing

    I think many people are just sick of all the e-mails we get from them!  I’m one of them.  Also, Shareholders are suing Groupon Execs because of false, skewed, & misleading data leading up to the IPO, & it will not come out good for them.  Not to mention, Groupon & other daily deal sites are just leading deal seekers from one deal to the next without the Local Biz actually generating a true long term relationship with the consumer.  When you accept $.25cents on the dollar for every product or service you give w/each Groupon, that’s  a recipe for disaster.  A loss leader like this, can tank a Biz in this economy very fast!

    • http://socialmediaexplorer.com JasonFalls

      Thanks for the comment. I know there are some concerns in various elements of Groupon’s business, but the consumer research doesn’t prove your assertions to be true of most people. And while Groupon is the 800-pound gorilla in the daily deal room, they aren’t the only player. Keep in mind too that there’s a reason the Sunday newspaper weights 5-10 pounds more than the weekday ones … because consumers want deals and coupons. What may be frustrating for you or me, is still resonating with the majority of folks.

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