Forecast: Consumer Daily Deals Spending to Reach $5.5 Billion by 2016 | Street Fight

News

Forecast: Consumer Daily Deals Spending to Reach $5.5 Billion by 2016

0 Comments 17 September 2012 by

A newBIA/Kelsey BIA/Kelsey forecast projects rapid growth for the online daily deals space this year, with an 87% increase in consumer spending on deals over 2011. The report says consumer deals spending will reach $3.6 billion in 2012, when slower growth will become the norm. BIA/Kelsey projects a still substantial 23% spending increase in 2013 before more modest increases bring consumer spending to $5.5 billion by 2016.

BIA/Kelsey: Consumer Spending on Online Deals

“After astronomical growth in 2012, the online deals marketplace is showing signs of maturity,” said Peter Krasilovsky, vice president and program director with BIA/Kelsey, in a press release. The decline in revenue growth notwithstanding, the forecast offers a big thumbs up for deals providers: a majority, albeit a slim one, of small business owners say they are likely to run a daily deal within the next six months, according to BIA/Kelsey’s Local Commerce Monitor. 11% are “extremely likely,” 15% “very likely” and 24.3% “somewhat likely,” whereas 26% are “not at all likely.”

The forecast echoes the merchant confidence seen in a July study released by Utpal Dholakia, a professor of management at Rice University, where 62% of the 641 small businesses surveyed said they profited on a daily deal, representing a 6% increase over spring 2011. This comes as many experts and merchants openly question whether daily deals facilitate repeat customers; a July study conducted by digital SMB marketer Constant Contact and research firm Chadwick Martin Bailey reported 58 percent of its 1,433 respondents did not automatically equate a positive daily deals experience with customer loyalty.

The report also forecasts a broader evolution of the digital deals space. “We’re leaving phase one, in which deals companies basically sent out sharply discounted deals to large mailing lists,” said Krasilovsky in a follow-up email. “Deals companies are now beginning to also focus on the merchant relationship, offering them a variety of business services, from reporting and payment processing to loyalty programs and continuous, instant deals.”

Deals giants Groupon and LivingSocial are invested in many of these services, Krasilovsky says, but they may not yet be reflected in their bottom lines. Last year, Groupon, which has seen its share price plummet to around $5 in the 10 months since its IPO, introduced Groupon Rewards, a rewards program that tracks a consumer’s credit or debit card and offers a merchant-specified rewards voucher once a particular spending target is reached, and Groupon Now!, a real-time, location-based deals service.

The online deals industry’s progression, the forecast speculates, could mean bigger players, such as American Express, Bank of America, Google, Amazon, Facebook and eBay, with access to particular targeting data might become increasingly involved in the space.

Patrick Duprey is an editorial assistant with Street Fight.

Big Things Coming in Local in 2015!


Join us in New York, San Francisco and Denver for Street Fight's industry-leading conferences. Top speakers, great networking, valuable insights, and killer parties.
Click here for dates and details!

Newsletter

Get hyperlocal industry headlines in your inbox every morning. Subscribe to the Street Fight Daily newsletter.


See how brands compare in local presence across areas such as local SEO, data accuracy, social engagement and more. Presented by Where2GetIt and Street Fight. Click here to see the battle!

Free White Paper: Pay-Per-Call’s Role in Improving Marketing ROI

Call campaigns can make the phone ring — or alienate prospective customers. Learn how to get it right: Download "Pay-Per-Call's Role in Improving Marketing ROI."

Produced by Street Fight Insights for Soleo.

Free White Paper: Contextualization

Learn how to deliver better, revenue-driving consumer experiences. Download "Contextualization: Leveraging Location-Based Technology and Mobile to Drive Success for Brands."

Sponsored by Artisan Mobile.

Follow Us

Get the latest Street Fight news, information and analysis via Twitter and Facebook.

The Commerce Graph

The “Commerce Graph” is a new framework we have developed to think about the future of physical exchange. The model offers an alternative to the dominant narrative about the commerce landscape that frames digital networks as an adversary of physical exchange.

The $20 Billion Mobile Marketing Opportunity

Strategies and insights into the landscape of targeting options and how they deliver foot traffic and sales for SMBs.
Check out our 2013 report and get your copy today!

Twitter

© 2014 Street Fight.

Powered by WordPress. Hosting by Page.ly