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What’s The Future Hold For the Daily Deal Space?



I guess today is the Daily Deal day here at Marketing Pilgrim since we have already told you about the New York Times foray into the deal a day space.

It just so happens that there has been a report released by BIA/Kelsey looking at the future of the daily deal space. What is intriguing about this report is how the research is divided into a 3 sections. Below is a chart about the revenue prospects for the daily deal industry through 2015. Notice that there is a low-end call, a high-end call and a most likely call (which looks to basically split the difference).

Right now, Groupon has the lion’s share of this total revenue while Amazon funded LivingSocial is trying to chip away at that. The rest of the deal space, according to BIA/Kelsey, has about 200 players currently.

One prediction from the group paints the kind of picture that $15 billion valuations aren’t necessarily built on (or maybe they are if there is no reason other than a feeding frenzy for the number).

Volume will increase, but growth rates will taper off:

*With increased volume and industry development, users will be better targeted by geographic and demographic needs.

*The novelty of untraditional deals will fade and e-mail open rates will fall. New users will be more representative of the population but less passionate than the current core of “college educated women.”

Hmmmmm. What’s your take?

  • http://www.dealsguide.com.au Daily Deals Australia

    Hi Frank, great article! Daily deals have exploded in the land ‘Down under’ within the space of 6 months more than 40 sites have or are about to launch this month. Aggregator websites are quickly becoming the first point of call to most consumers as it’s impossible to view each website. I’m part of a team who set-up a new start up aggregator website called Dealsguide. Visit http://www.dealsguide.com.au and there you’ll see all the Australia Group Buy companies on the one page.