Daily deals industry

Groupon, which went public in , has exited many of the 48 countries where it used to operate. Amazon, apparently not seeing the value in the faddish e-commerce trend, shuttered its own daily-deals site, Amazon Local, last year. Now, the two largest daily-deals companies are joining forces as the once-hot market continues to cool. Daily deals never lasted as more than a passing trend.

Daily deal websites: U.S. consumer spending from 2010-2016

Users lacked brand loyalty: Potential customers register as members of the deal-a-day websites and receive online offers and invitations by email or social networks. As of [update] , deal-of-the-day sites have continued to grow in popularity, although new concerns have arisen over the longevity of the concept and the financial viability of one-day deals for small businesses. The deal-of-the-day concept gained popularity with the launching of Woot. By late , the deal-of-the-day industry had greatly expanded to over deal-a-day sites.

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In November , Groupon entered the market and became the second fastest online company to reach a billion-dollar valuation. Other online businesses, including Facebook, [3] and Google tested their own daily deal sites, withdrawing them after they proved unsuccessful. However, the rise of social networks, such as Facebook and Myspace, has accelerated the growth of daily deals sites, allowing popular deals to spread virally. The deal-of-the-day business model works by allowing retailers to market discounted services or products directly to the customers of the deal company, who receives a portion of the retailer's profit.

This allows retailers to build brand loyalty and quickly sell surplus inventory.

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The majority of deal-of-the-day sites work directly with local businesses and online retailers to develop deals significantly discounted compared to recommended retail prices. Using a group buying formula, a minimum and maximum number of deals are made available.

Typically, deal of the day sites segment merchandise by specific designer sales.

Accurita Daily Deals - Auto Industry Intro Video

Descriptions of the deals are often emailed to customers when the deal goes live, sometimes with creative or humorous descriptions. The practice of sending these emails has been criticized [5] by e-mail marketing professionals and users.

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However, evidence suggests this aggressive strategy is effective at generating sales. Customers purchase the deal on the deal-of-the-day website, rather than directly from the retailer. The websites then retain the customer data, rather than the retailer.

Fraud: The Scourge of the Daily Deals Industry

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Fraud: The Scourge of the Daily Deals Industry | HuffPost

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