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.

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 powered by Disqus

Advertisement

Advertisement

Advertisement

From The IR Blog

FPO

Pablo Palatnik / E-Commerce

Holiday search marketing tips for online retailers

With Google devoting less space to search ads, those positions become more valuable than ever.

FPO

Bart Mroz / E-Commerce

Drive Back to School online sales even after classes begin

Parents don’t always get through their entire shopping list by the time school starts, so ...

Advertisement