Daily Deal Industry Slowly Shifts to E-Commerce

April 19th, 2012 at 2:07 pm
 


In these troubling financial times, a new movement has been sweeping across major cities around the world that bring businesses earn income and consumers enjoy discounts.

Many websites have put up daily deals, discounted services (from mani-pedi to spa treatments, from yoga classes to wine tasting) provided by neighborhood businesses big and small that are only available for purchase at a limited time. Consumers buy these deals using their credit cards–in some cases depositing money in bank accounts–they receive proof of transaction through their email, which they print out and present to the merchant.

Since daily deals started over a year ago, as pioneered by Groupon, the industry has ballooned with the introduction of hundreds more such websites. The movement has become so massive in scope, people in the know begin to refer to daily deals as e-commerce. This opinion is definitely growing support, as showing during the “State of the Industry” Daily Deal Summit East held in New York yesterday.

But the prospect is not as sunny as it was when it began. Deal industry tracker Yipit.com has monitored 845 deals sites since its launch, with only 400 still putting out deals. Yipit co-founder Jim Moran stated during the summit that the reason for such slow growth was either the audience for deals is still growing or that the industry is just “waiting for the other shoe to drop.”

Still, those sites that remain are able to stay strong, with some able to branch out from daily deals to selling products and travel packages. The challenge now, however, is whether these deal websites be able to convince its existing customer base to purchasing high-end products like watches and shoes.

Source: Portfolio.com

 

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