September 26, 2012, 11:37 AM

Daily deals are big business for online merchants

But over-saturation will reduce the  growth rate, a report says.

Thad Rueter

Senior Editor

Lead Photo

Consumers will spend $5.5 billion in 2016 on daily deals, flash sales and other online discounts, up 53% from $3.6 billion this year, projects consultancy BIA/Kelsey.

The spending amount in 2012 will increase nearly 87% compared with 2011, BIA/Kelsey says. Despite those gains, the year-over-year growth rate will start to slow after 2013.

“After astronomical growth in 2012, the online deals marketplace is showing signs of maturity,” says Peter Krasilovsky, the company’s vice president and program director. “There has been consolidation in the space, deal conversion rates may be suffering due to over-familiarity and the market may be near saturation.”

BIA/Kelsey also found that just more than 50% of local and small businesses are “extremely likely,” “very likely” or “somewhat likely” to offer deals within the next six months. That’s according to a survey of 300 merchants. The remainder reported they are “not at all likely” or “not very likely” to offer such deals.

BIA/Kelsey predicts that more small businesses will turn to mobile deals designed to be quickly redeemed by consumers, along with offers tied to loyalty programs.

Comments | 1 Response

  • I, for one, have become numb to daily deals, reinforcing your statement that the market has hit a saturation point. At one time, it seemed that every publisher known to man had a strategy to offer daily deals. For business owners, the choices had to be intoxicating. Looking forward to further consolidation.

Sign In to Make a Comment

Comments are moderated by Internet Retailer and can be removed.

Not a member? Signup for free today!

Advertisement

Advertisement

Advertisement

Relevant Commentary

FPO

Jason Squardo / Mobile Commerce

Five tips for achieving high mobile search rankings

Searches on mobile devices will soon exceed those on computers, Google says. Retailers that keep ...

FPO

Sergio Pereira / B2B E-Commerce

Quill turns to its B2B customers for new ideas

Coming in April is a new section of Quill.com that will let customers and Quill ...

Advertisement