What Makes Shoppers Buy Daily Deals?

Think daily deal sites like Groupon and LivingSocial are a passing fad? Your customers disagree. A whopping 92 percent of shoppers think daily deals are here to stay, according to new research from Constant Contact.

The study, conducted by Chadwick Martin Bailey, polled more than 1,400 U.S. consumers about their daily deal attitudes and habits. It found that people who sign up to receive daily deal emails do so with purpose: 80 percent of respondents who receive offers say they’ve purchased at least one in the past six months.

This appears to be good news for small businesses. Although large companies such as Whole Foods have run successful deals, one in three people say they’re more likely to click “buy” when an offer comes from a small, local business — especially if it’s one they’re already familiar with.

Of course, running a daily deal doesn’t guarantee a boon for your bottom line. The internet is filled with tales of woe from companies that later regretted running an offer. However, if you do your homework and determine that a deal could benefit your company, consider these additional report findings, which may encourage your success:

  • Customers are most likely to purchase deals from small businesses they don’t know when they’re recommended by someone they do know.
  • In general, nearly one-third of shoppers say they’re most likely to a purchase an offer when someone they know shares it with them. This is particularly true of women.
  • Email — not social media — is the favored medium for sharing deals with friends and family. Twice as many people share deals via email than on Facebook.
  • Restaurant deals are the most likely to be shared via email or social sites, by an easy margin: 65 percent of people who had shared in the past six months did so with a restaurant offer. Entertainment deals were next at 48 percent, followed by grocery offers at 36 percent.
  • The majority of consumers (60 percent) agree that doing a daily deal is a good way for a small business to get the word out.
  • A successful deal doesn’t promise repeat business. Only 42 percent of consumers say that a positive experience would turn them into loyal customers.

A final thought: Shoppers who spread the word about daily deals are the big game in this hunt. Their actions can have a multiplying effect on sales; 78 percent of people who have shared a deal say they’ve done so more than once. So, when you find those customers, shower them with love.

About Kevin Casey

Kevin Casey is a regular contributor here, at InformationWeek and elsewhere. Find him on Twitter @kevinrcasey.
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3 comments
MetroDeal
MetroDeal

For customers to see drop-down prices on different daily deal sites makes it tempting for them. Aside from that, if the inclusions on the said deal will benefit them, they will definitely purchase the deal in an instant. But little did they know that the success of the deal being posted will depend on the deal itself, the price and the deal inclusions.

jhelfrich
jhelfrich

I have two local competitors who seem to have successfully used daily discount deals to 'get the word out'. But the pricing and the net income seems prohibitive. While I only do half the business volume they do, my margins are double, $40 compared to $20. I'm concerned that my business will get 'lost in the shuffle' if I don't dive in to get my volume up. 

Is there a better way to do this, instead of making it a 'permanent discount?