The daily deal phenomenon: Who, What, Why of the latest craze in online shopping July 5, 2011
London, (July 5 2011): Daily deal fever is sweeping the nation! Consumers are rushing to register for sites such as Groupon, kgbdeals, kelkoo select, Living Social and DailyDeals that offer discounts and deals every day according to the latest survey by Lightspeed Research. In the second in their series of research looking at how e-commerce is changing the way we shop, the spotlight falls on the rise of so-called ‘daily deal’ sites and highlights the challenges for their owners. Whilst they are attracting new members at a pace, many consumers are still unmoved to purchase. .
Lightspeed Research surveyed 1000 people on their online panel during June and found that 72% were aware of daily deal sites. Groupon is by far the most well-known and popular site, with almost half of those who were aware of deal sites– 48% – registering on the site. eBay is the second most popular (19% registered) followed by kgbdeals (14%).
Registrations may be high, but there is still work to do to convince members to part with cash. Of all respondents who have registered, just over half have made a purchase (54%). The main reason for not buying is that members haven’t been enticed by any of the deals – cited by 59% of those registered on deal sites.Younger respondents are more likely to cite financial constraints as their main reason for not making a purchase (22%). 10% of all respondents said they’d like to buy but the deals were located too far away.
Although women are more likely to register for daily deal sites (72% vs 61% of men), they are less likely than their male counterparts to commit to one of the offers and part with cash (51% have never made a purchase, compared to 39% of men). Men on the other hand need little encouragement. One tenth of men whohave bought from daily deal sites in the past 12 months have made 10 or more purchases.
The most popular deal items purchased are entertainment and event tickets (34%), electronics (27%), clothing (26%) and dining deals (25%). Men lead the way in almost all categories except for spa trips and health and fitness (see chart).
And here’s the clever bit. Receiving an email with a deal is so appealing that almost two thirds of members who had purchased on a daily deal site (64%) have bought an item they were previously undecided about. Men and 18-34 year olds are more likely to be enticed to respond, but the deal certainly acts as a catalyst to finally make that decision.
More than half have bought an item they had no intention of buying. 59% of 18-34 year olds admit to this, compared to 47% of 35-54 year olds and 40% of 55-64 year olds. And although women generally are less likely to buy deals, those that do show that they too can impulse buy with 54% admitting to being enticed to spend through a daily deal compared to only 48% of men.
Ralph Risk, Marketing Director, Lightspeed Research Europe says “Everyone loves a bargain – and we know from the research we’ve already done in our series on e-commerce that a lot of online shopping is considered, and thoroughly researched. 75% of people check prices before buying what they are looking for and 87% do some online research.
Daily deal sites are different – the offers have a short shelf life and can be a little random. Our research shows that daily deals can encourage impulse buys on items consumers were either initially unsure of weren’t intending to purchase. There’s more work to do to raise awareness of daily deal sites, as well as to increase the appeal of offers that will help encourage members to make a purchase.”
For press enquiries please contact:
Lucy Green, Greenfields Communications
firstname.lastname@example.org T: 07817 698366
Ralph Risk, Marketing Director Europe – Lightspeed Research
email@example.com Tel +44 (0)20 7896 1950 / +44 (0)7876 507689
About Lightspeed Research
Lightspeed Research delivers valuable data to help clients make informed business decisions. With proprietary online panels throughout the world, our verified, engaged, and deeply profiled survey respondents can support research studies that vary in scope and complexity. Lightspeed Research’s expert Client Operations Team offers data collection services including survey design, sample management, programming and reporting. The company has offices throughout the United States, Europe, and Asia Pacific. Lightspeed Research is part of Kantar, the information insight and consultancy division of WPP. For more information, please visit www.lightspeedresearch.com
The dominance of on line social media is such that company’s can no longer afford to ignore them. Without question,Facebook still controls the market, but that does not overlook the importance of MySpace, Twitter, Digg, reddit, You Tube,Stumble Upon or Meetup
Each social media network offers businesses in different fields different advantages. Whereas Facebook is fast been adopted by all businesses as an integral part of their online promotional mix, others are more tailored.
For example, MySpace is traditionally more popular with the music industry. Stumble Upon gives all web sites the chance to make their sites more visible and Twitter allows direct conversation with an infinite number of prospects.
There are various online reports that sing the merits of social media. One report states that 85 percent of businesses it surveyed confirmed that social media directly contributed to the business’s online exposure and resulted in increased revenue.
In the same report, 63 percent of businesses surveyed said that social media increased traffic and subscribers to their sites; 56 percent said that social media led to new online business partnerships while 54 percent said that social media improved their online ranking.
A further 52 percent said that social media generated qualified leads; 48 percent said that social media directly contributed to the company’s ability to sell its products and close sales while another 48 percent said that social media significantly reduced the company’s overall marketing budgets.
In short, social media has led to a democratization of media. It has paved the way for a new generation of online relationships and conversation. It breeds and encourages creativity and mixes of culture. It fosters an ethos of community, sharing and connecting whilst making all sorts of relationships, particularly business relationship more transparent.