One deal supermarkets rarely jumped on

Articles
October 12, 2011

One deal supermarkets rarely jumped on

Sure, Groupon is a household name. But hundreds of sites trying to emulate its growth can't differentiate much – for themselves or their advertisers.

Americans love a bargain.

From the days when Monty Hall excited live audiences and millions of TV viewers with Let’s Make A Deal to today’s era where Groupon leads the way, the rush of a great deal makes people giddy. Sometimes this reaches a point where they can lose impulse control and click their way to deal purchases they may never actually use or experience.

The deals expire, and with this rising pile of spending waste the media reports of deal fatigue escalate. But is deal fatigue a reality? Not necessarily, says Rice University, according to an Ad Age account: Just 1.5% of survey respondents said they use Groupon less than they used to; just 8% said they lost interest in daily deals over time; 13% of heavily daily-deal buyers said they purchase them less often.

Some people may be sticking with the habit. Yet 61% of consumers surveyed told Lab42 researchers they’ve let a deal expire before redeeming, so this experience is widespread. Among Lab42’s respondents, 51% had bought a deal on Groupon, 37% on LivingSocial, 21% on Eversave and 18% on SocialBuy.  

Other Lab42 findings, which supermarkets might want to leverage if they intend to test any deal promotions, include:
•    55% keep up with daily deals by e-mail, 47% by direct website, 25% by an app, and 21% through deal aggregators
•    60% only buy deals from businesses with which they are familiar
•    The deal-buying practice is redundant – 38% have bought 1 to 5 deals in the past year, and 35% have bought 10 or more
•    Mostly, they’ve bought restaurant deals (57%) – other incidences seem evenly split among spas, outdoor activities, hotels, arts and fitness

Let’s set aside the habits of deal buyers for a moment, and the obvious need to mine heavy deal users, in order to see a shakeout among deal-buying sites is underway. Some 170 of 530 daily-deal sites have shut down or been sold in 2011, said The Wall Street Journal citing aggregator Yipit.com.  It’s a matter of finance:  marketing costs to acquire productive customers are soaring, sales staffs are growing, and deals don’t always produce either for the site or for the advertiser/retailer in building repeat and loyal traffic.

With such competition, it’s not surprising that Groupon no longer displays the specific number of daily deal vouchers bought by consumers. To eliminate sales estimates by competitors, Groupon is purposely undercounting voucher volume by between 0.5% and 19.5%, the company noted in a blog this week.

Such secrecy won’t stem a shakeout, or even a potential weakening of Groupon sales, if consumers feel the impulsive buys no longer suit a waste-free philosophy that’s needed to survive tough economic times. Sure, we love to have fun, but at what expense.