Evolve-or-Die Time for Daily Deal Websites

The glory days of the daily deal business, according to some recent surveys, are heading for the end. The market analysts, who promised an impressive growth to the deal industry not long ago, are unanimously changing their forecasts to less optimistic. The leading giants of the deal of the day industry, such as Groupon, LivingSocial and others, are reeling under the weight of various troubles - including key staff changes, shifting revenue and stock value, public campaigns against promoting guns and alcohol. All market players are forced to look for new ways to stay afloat - introduce diverse services and mobile apps, merge or partner up with other businesses, expand interests to new geographical and niche markets. The situation on the deals market is not a simple one, but at the same time all these changes do not necessarily mean decay. Evolution is a natural process for any living system and the key to survival in the changing world of daily deals is an ability to adapt.

One of the issues holding back the deal market is that a significant number of merchants have realized that offering a deal does not necessarily help business. Many entrepreneurs do not believe anymore that the deals and the deep discounts bring repeat customers. It often happens that the merchants lose income because of the deal specials. Instead of drawing a massive amount of new repeat customers, the deals bring only some one-time customers who want to save money and entices regular customers who otherwise would have paid full price. As a result the businesses refrain from using daily deal websites for promoting their products and services. To break the ice, daily deal operators have to understand that the merchants are their primary customers, not the buyers who purchase the deal. Daily deal companies have to make the deals profitable for the merchants they do business with.

In order to return customers’ disposition daily deal companies need to bring up a model where both buyers and merchants benefit in the end. One of the ways to do so is to focus on advertising of real-time, hyper-local deals. If a restaurant or a hair salon has empty seats right now and there is an option to bring people in right now at a discount, there is a lot more power in that.

Another method to return interest of the customers is to offer deals that stand out. Consumers are bored by the constant flood of emails offering discounts on the same types of products - Thai restaurants, pizzerias, massage, manicure, yoga and so on. People became numb to that redundant offers that hit their inboxes every day, they less frequently buy vouchers or never use them. Both merchants and deal operators lose out because of it. Offer consumers an awesome deal that let them try new things - exotic sports, extreme walking tour, state of the art high tech device, fantastic gifts, weird decorations or any other exciting goods or events people are dreaming about. To pique interest even more, create a sense of urgency, put a timer or limit the quantity, and people are likely to make the purchase and think about it later.

The bottom line is that the daily deal companies should emphasis on more creatively structured deals to acquire new loyal customers and should look for innovative ways to make the deals profitable for merchants. The business model for daily deals is likely to change soon and it is probably going to become more tailored and profitable. Anyway, the dedicated deal business owners should seriously rethink the way they operate in the market.