In its second-largest acquisition, Amazon buys the company for $970 million.
But 56% of consumers don’t subscribe to a single deal e-mail, Accenture says.
Daily deal operators tend to appeal to the young and the affluent, according to a new report from consulting firm Accenture Ltd.
The report found that 54% of consumers from households earning at least $150,000 a year subscribe to e-mails sent by daily deal operators. And 47% of shoppers between 18 and 24 years old receive e-mails sent by such discount providers as Groupon and LivingSocial. That compares to 44% of all respondents, leaving 56% of consumers surveyed not subscribing to daily deal offers. Accenture based its report on an online survey in September of approximately 1,000 U.S. consumers.
The proportion of consumers who subscribe to e-mails from daily deal operators increases with household income, which means retailers seeking to appeal to affluent consumers should figure out ways to leverage the daily deal marketing approach, says Tom Jacobson, Accenture senior executive, pricing and profitability strategy.
As for reasons daily deal subscribers don’t buy vouchers, the survey found that 37% of them say that deals do not include offers for desirable items or services. 24% say the deals are not focused on their local markets. But e-mails with enticing offers can compel a consumer to make a purchase he otherwise might not make, according to the survey, with 26% of respondents saying they’d bought an offer for an item or service they hadn’t anticipated buying.
“Businesses need to strike a balance between providing customers, particularly those in the upper-income ranges, with new experiences they would not normally try, while not providing too many esoteric deals that serve only small portions of their customer base,” says Jacobson.
Among the deal operators seeking to find that balance is LivingSocial, which is offering an array of deals. For instance, LivingSocial earlier this month launched an invitation-only service featuring offers for high-end food and restaurant deals.
While the daily deal operators’ offers appeal to many, there are a significant number of consumers who find the businesses model unappealing. 42% of consumers say they “do not like anything” about the sites.
“The daily deal craze is still strong, especially with young consumers and people with higher incomes who can make their purchases right away,” Jacobson said. “But it is interesting to note that a significant group of Americans do not like the deals and are conceivably finding other ways to save.”