Daily deals sector set for massive change in 2012

By Chris Lee

An estimated seven million people in the UK subscribe to daily deal websites. This year will see massive improvements of daily deal users in terms of increased competition and better targeting, according to an industry study from Buyometric, a site which filters daily offers.

Due to the fragile state of the UK economy, Buyometric said it expects to see further growth in consumers’ use of daily deal sites. The pressure on household budgets will increase throughout 2012, with rising unemployment and the fact that pay rises almost certainly won’t keep up with the increasing cost of living. It is likely, however, that usage will switch from impulse purchasing to savvy shopping.

Buyometrics’ founder, Paul Fisher, said that even if the overall number of UK subscribers to daily deal sites does not grow, he would expect to see sector growth of at least 20-30 per cent.

“Many consumers have been ‘sitting on the sidelines’ without having as yet made a purchase. Our research also identified that whilst only 69 per cent of subscribers to daily deal websites had already bought a deal, 96 per cent said they planned to make a purchase in the next 12 months,” he said.

Fisher expects to see larger daily deal providers expand their offerings in 2012, both in terms of product category and geographic reach, plus he expects to see consolidation in the market as larger players seek to grow their user base through acquisition.

Email overload

In its recent study, Buyometric found that more than half (52 per cent) of all subscribers to online discount deal providers receive five or more deal emails per day, and that 50 per cent of those who receive a high volume of emails think this is too many, presenting a conundrum for email marketers.

Fisher commented: “There has been much talk of a bubble in the daily deals sector, with email fatigue being cited as a possible trigger. It’s clear that daily deal providers need to make some changes in the way they reach out to their customers. While we don’t see any major fallout on the horizon, there will be many changes in the daily deals sector over the coming 12 months.”

Stay on target

According to Buyometric’s research, men are “turned off” by the untargeted nature of the main deal providers and so new male focused offerings, or better targeting by existing providers will be necessary to engage this group. This could provide a major new market in 2012, Fisher argued, adding that very targeted daily deal sites will continue to emerge over the coming months, often being tied to an existing community website.

“Look for hobby niches such as golf (e.g. daily golf deals), or demographic niches such as mother and baby. Their survival will depend on robust marketing strategies,” he added.

The main daily deal sites will also start to offer some limited levels of personalisation, Fisher said, however it will still be in their interests to present their users with as many deals as possible, on the off-chance that they will be interested.

Aggregation nation

Consumers will become more savvy in how they manage their daily deal emails, according to Fisher.

“We expect continued growth of the aggregation sector in 2012 as users of daily deal sites get bored of receiving several emails a day and look at ways of consolidating the information about deals into one place. Expect to see larger international aggregators extending their reach into the UK, and vice versa,” he advised. “Consumers will find themselves presented with daily deal buying opportunities across myriad websites in 2012, extended beyond just the daily deal providers and aggregators. Offering tailored daily deals to users is proving to be a successful monetisation strategy for community websites and mailing list owners. So far from disappearing, we predict they will become more prevalent in 2012.”

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