BIA/Kelsey: U.S. Deals Marketplace to Hit $4.2B by 2015 | Street Fight

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BIA/Kelsey: U.S. Deals Marketplace to Hit $4.2B by 2015

0 Comments 14 September 2011 by

The daily deals industry in the U.S. is growing so quickly that local media research firm BIA/Kelsey has revised its March 2011 forecast to reflect the expanded market. The revised report — which measures daily deals, flash sales and instant deals in a single metric — finds that consumer spending on deals will grow from last year’s figure of $873 million to $4.2 billion by 2015. This is a bump up from their March estimate of $3.9 billion (for 2015), and now represents a 36.7% compound annual growth rate.

Notably, while deal revenues for 2011 have significantly shifted upward (to $2 billion from initial estimates of $1.2 billion), the overall trend is one of gradual four-year growth, rather than the classic “hockey stick” scenario.

Peter Krasilovsky, the company’s vice president and program director for marketplaces, (and Local Onliner blogger) told Street Fight that the latest report is “based on more comprehensive data that we’ve been able to bring in since [March].” Besides changing dollar figures, the new forecast also indicates that a broader patchwork of players have entered the deals space.

“We’re seeing activity coming in from players with a smaller footprint. TV, radio, media… they’re playing a more significant role.” Krasilovsky cited activity by AT&T and Google, behemoths that are relatively new participants in an industry already bursting at the seams with over 600 deal providers.

Groupon and LivingSocial may not be checking the rear view mirror yet, he noted: “Groupon leads in almost every market in the US,” he says, “and that tells a story too.”

While competition is plentiful, consumer interest has not been depleted. “Awareness of the deal space is not universal at this point,” Krasilovsky points out. The deal space’s “fad factor” is passing away, too, as marketers recognize the fact that the basic deals concept connects with consumers (to the tune of four deals a year for the average active subscriber).

Barriers to entry in the deal space are low, but Krasilovsky questions whether all participants will have staying power. Deals may be, he says, “not an email play so much as a social media play,” evolving into just one component of an overall e-commerce plan.

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