Why Read This
While significant media and investor interest in daily deals has fueled the hype around this business model, data from consumers indicates that daily deals are significantly challenged models. While consumers enjoy receiving deals, these deals frequently cannibalize sales from otherwise lucrative shoppers. Furthermore, the challenges that these companies face to attract more online shoppers to subscribe to daily deal emails indicates that these models are expensive to scale. Because so many daily deal buyers are already customers of a merchant or brand, these programs will likely evolve to become components of merchant- or brand-sponsored loyalty programs rather than new customer acquisition tactics.