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BizReport : Ecommerce archives : March 03, 2011


Forecast: Daily deal sites set to soar

Consumers are talking about deal sites like Groupon all over the Web. According to analysts with BIA/Kelsey, the good news is that these sites are expected to grow more than 35% by 2015, to reach $3.9 billion - and that is on the slow-growth side. The category could see as much as 47% growth (CAGR), depending on consumer adoption, transactions and deal areas.

by Kristina Knight

biakelsey.jpgOn the high end of the growth scale, daily deal sites may reach $3.9 billion in the US by 2015.

To date, more than 170 city-based deals are offered through these sites to about 102 million American consumers, according to the report. Because of the sharp growth rate, some believe that a shift in local media spending may push more ad dollars into the daily deal space moving forward.

"The combination of fun offers and convenience makes deal a day a very attractive way to reach local users, and for publishers to work with small businesses," said Peter Krasilovsky, Vice President and Program Director, Marketplaces, with BIA/Kelsey. "We also believe that deal a day doesn't exist in a vacuum. It will become a part of the growing deals and offers landscape."

So far the early daily deal releases - Groupon and LivingSocial, specifically, - are leading the deals category, but there are more than 200 smaller sites. These include destination and white-label sites which may or may not have good traction. The problem with these sites is that they cannot remain 'new' for a long length of time. Yes, the deals change, but right now the category is led by the newness of it for the consumer. To remain relevant these deals sites must include better targeting options so that relevant deals keep consumers opening those emails.

"We expect [deal a day growth] to continue as companies in the space are rapidly adding markets and increasing total user count," said Mark Fratrik, Vice President of BIA/Kelsey. "They are also subdividing existing metros to provide deals closer to where users live, which we believe will help offset any drop-off that may occur due to consumer fatigue as the novelty of the form fades."

According to details from Coupons.com, digital coupons reached more than $1 billion in savings in 2010; many coupons sites offer daily deals. The report also shows that the average digicoupon-using household has an income of more than $105,000 per year, one-third of these households are college educated and are twice as likely to redeem the coupons.






Tags: BIA/Kelsey, Coupons.com, daily deal offers, daily deals, ecommerce, Groupon, online coupons








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  • Kathy

    Many people don't realize that daily deal sites were around way before Groupon and LivingSocial. Even though these pioneer daily deal sites are centered on products and not on local city deals, the concept of a deeply discounted deal business model has been around since 2004/2005. Examples of these early daily deal sites are http://www.woot.com and http://www.midnightbox.com

  • Sheldon Nesdale

    I agree that daily deal websites are becoming increasingly popular Kristina, but I still come accross people everyday who have never heard of the concept! There is plenty of growth left in this idea :)

  • Daily deals and group buying sites are very popular, so I can see how their market is going to grow over the next few years. I think many more sites are going to crop up.

    Use http://www.dailydealpool.com to find the best deals and sales in your area. The site will email you a list of the greatest buys daily, so you don't have to search for that perfect coupon.

  • Websites like Woot.com are so addictive. They make it so easy to purchase things, sort of like Amazon does. The idea is super simple and you feel like you're not spending that much every time. It's not surprising these sorts of sites are a huge success.





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