March 5, 2012, 12:14 PM

Daily deals spur repeat business

Nearly half of shoppers return to merchants after buying an offer, a study says.

Lead Photo

Larry Freed

44% of shoppers who use daily deals return to the merchants that provide the offers and another 47% of consumers plan to do so, according to a new report from ForeSee.

The research firm based its report on responses from nearly 10,000 consumers visiting the top 40 e-commerce sites in the Internet Retailer Top 500 Guide last November and December. 

The survey also found that while 40% of daily deal buyers were already customers of the merchant offering a discount, 26% were infrequent customers and 29% either had never heard of the merchant or hadn’t bought from them before. The remaining 5% were former customers with no plans to purchase deals again.

The figures show that daily deals can bring in substantial new business, says the report’s author, Larry Freed, ForeSee CEO. “Not only do daily deals spur new business, they also inspire repeat business,” he says.

The report also shows that the daily deal market is increasingly a two-horse race between Groupon Inc., to which 52% of surveyed consumers subscribe, and LivingSocial, which reaches 30% of shoppers in the study. Groupon’s market share rose one percentage point from ForeSee’s last daily deal report in spring 2011, while LivingSocial’s market share increased from 24% in the spring.

In the previous 90 days, half of the surveyed consumers had bought a Groupon voucher, up 6.4% from the spring, and a quarter of respondents had bought a LivingSocial deal, a 13.6% jump from the previous report.

Despite that growth, the number of consumers who say they subscribe to any daily deal service decreased to 60% from 65%. But Freed says that isn't necessary bad news for daily deal operators because the number of consumers who buy deals is rising.

The number of consumers who have purchased a deal in the last 90 days is up 15.8% from 38% to 44%. "That's a significant jump," says Freed. "The bottle line is that while there are slightly less subscribers, there are more purchases being made, which isn't a bad situation at all."

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