What is the Future for Daily-Deals and Digital Coupons? Good for Consumers, Bad for Business?
It doesn’t take long to find hundreds of complaints about Daily Deals, and the complaints are coming from both sides- shoppers and businesses. People are starting to realize there is only 1 person in this equation that is the really winning… yes you guessed it, the Daily Deal sites.
Business is booming! But how are those daily deals working out for the businesses that offer them? A new study says: Not so great. For the uninitiated, a business that offers a daily deal through one of these sites must provide a substantial discount (over 50%) – Then, a minimum number of customers must buy the deal, prepaying up-front and getting a coupon they present to the company. If there aren’t enough customers that buy into the deal, it’s cancelled. The trade-off is a guarantee of a large volume of new-customer traffic in exchange for the discount..
More than 40 percent said they wouldn’t do a daily deal again. Business owners who were unhappy with their deal experience reported daily deal users didn’t buy additional items beyond the deal offer. They also reported the daily deal customers tended to be one-time visitors and didn’t become repeat customers.
The Daily Deals site pressures the business into offering a massive discount with the promise of new clients and they will benefit from the lifetime value of that customer. Studies have found that most of the time that type of shoppers will move on to the next deal anyway. But after they offer a 50% discount and give 50% commission the business in many cases runs that deal at a loss
It is obvious that shoppers love businesses offering these massive discounts but there have been scores of complaints. This can range from the business being to busy to fit them in to the business having to close due to poor planning. It is very surprising how many people buy the deal out of impulse in the fear of losing out and don’t even get around to redeeming that offer. When this happens the Daily Deal site doesn’t even pay the business for that coupon.
The study, conducted at Rice University’s Jesse H. Jones Graduate School of Business by associate professor Utpal Dholakia, polled 150 businesses that did Groupon deal offers in the past year. The results: About one-third of participating businesses said their daily-deal offers were unprofitable.
There is a new site that is fair for everyone and the Voupons Monster will make sure of that.
What happened to the good old Coupon? When you think about it, it totally makes sense. People find deals and they are interested in and then take that coupon and pay the business direct. The shopper gets a discount and the business keeps all the profit. Printed coupons are dated and daggy and cutting a piece of paper out is not cool. People love technology and want a modern way to do this.
A local company has had huge success on the Gold Coast by offering Coupons Via SMS to shoppers for FREE. They find deals on the site, send that Voupon to their phone for FREE. Just show the phone when paying to save. Shoppers love it because they don’t have to hassle their friends to try and trigger a deal and don’t have to worry about redeeming the offer before it expires. The business also loves this model because they get to keep all their profit.
Voupons is a young, funky website with all the Social Media streams.
Voupons is looking for Business to join Voupons now! www.voupons.com.au