An ominous bell is tolling for daily-deal sites. Groupon may be growing like kudzu, but it's losing money as more daily-deal sites like LivingSocial enter the marketplace. But don’t count out daily salemails yet. Daily-deal sites are recalibrating by offering a cache of products that drill down to a particular neighborhood, drum up repeat business and calculate metrics. What’s the real deal? Business owners can now design the right daily salemail to fit their brand experience.
Over the next few years, it's likely that daily-deal sites will have to settle for lower shares of revenues from businesses compared with their current levels, and it will be harder and more expensive for them to find viable candidates to fill their pipelines of daily deals, according to Utpal Dholakia, associate professor at management at Rice University's Jones Graduate School of Business.
Social promotions such as those offered by deal-of-the-day website Groupon are wildly popular with shoppers, but they might not be as big a hit for businesses, according to a recent study by Rice University's Jesse H. Jones Graduate School of Business. Groupon promotions were profitable for 66 percent of the businesses surveyed for the study, but they were unprofitable for 32 percent. More than 40 percent of the respondents indicated they would not run such a promotion again.