Daily deals in the UK: More growth, more competition and more targeting in 2012

Posted by on 10-01-2012, under Group buying, Groupon, KGB Deals

Daily Deal logos
There is a great deal of speculation over where the daily deals industry is headed in 2012. Groupon’s IPO and Living Social’s recent fundraising activity have renewed talk of a bubble. Niche start-ups are entering the space on a daily basis, while longer standing competitors are dropping out of the race with increasing frequency.

In the UK an estimated 7 million people subscribe to daily deal websites. What will these consumers expect to see over the coming 12 months, and what opportunities exist to see additional growth?

As the UK’s largest aggregator of daily deals, Buyometric has a unique overview of the whole industry. We aggregate deals from most of the key UK players – from market leaders to tiny regional start-ups.

Growth

Overall, we expect further growth in consumers’ use of daily deal sites. The pressure on household budgets will increase through out 2012, with rising unemployment and the fact that pay rises almost certainly won’t keep up with the rising cost of living. Daily deals will benefit from an overall increase in the usage of money saving websites.

A key growth strategy for the largest daily deal providers will be a continued expansion in their areas of coverage, and increasing the number of deals available across the categories. Groupon remain, by far, the largest provider in the UK with twice the geographic coverage of any other player. Where they have trail blazed, others will follow. Large areas of the UK remain un-served by any local deal providers at all.

While the larger players with access to sufficient funding and marketing muscle will continue to expand, we expect some fall-out as smaller non-specialist daily deal websites drop out of the race or are swallowed up by the larger providers. Some daily deal sites have business models that are not economic. For instance Crowdity, Keynoir and Kelkoo Select have left the race recently (acquired by Wowcher and Time Out respectively) and we expect more buy-outs to follow as the larger sites look to grow their user bases in a cost effective way. Wowcher, Time Out and Money Supermarket will be the main beneficiaries of this consolidation and are rising stars to watch in 2012.

Targeting

One area where we expect to see growth in 2012 is men’s deals. In recent research conducted by Buyometric, we found that women were on average over 40% more likely than men to be subscribers to the three leading daily deal sites – Groupon, Living Social and KGB Deals. Men are turned off by the untargeted nature of the main deal providers and so new male focused offerings, or better targeting by existing providers will be necessary to engage this group.

Ultra specific daily deal sites will continue to spring up in 2012, often being tied to an existing community website. Look for hobby niches such as golf (e.g. Daily Golf Deal), attitude niches such as environmental, or demographic niches such as mother & baby. However, unless they have a solid marketing plan or access to a large number of users, they will struggle to reach profitability. Sites with a small userbase will find it difficult to negotiate the commissions needed and sell in sufficient quantities to pay for sales staff. Without the sales staff, they won’t be able to negotiate enough deals to keep users making purchases. It’s a vicious circle.

Aggregation

We expect the continued growth of the aggregator in 2012 as users of daily deal sites get bored of receiving several emails a day and look at ways of consolidating the information about deals into one place. Our research1 found that over 50% of subscribers to daily deal providers receive 5 or more deal emails every day, and two thirds (67%) say that they do not always read them. The aggregator market will intensify, with an increasing number of intelligent “targeted” services replacing the current simple listing solutions. Expect to see larger international aggregators extending their reach into the UK, and vice versa.

The main daily deal sites will also start to offer some limited attempts at personalization, however it will still be in their interests to present their users with as many deals as possible, on the off-chance that they will be interested.

Even if the overall number of UK subscribers does not grow, sales growth of at least 20-30% can be expected just from existing users, since there are many sitting on the sidelines without having made a purchase yet, who can be expected to get involved in 2012. Our research in November and December 2011 identified that whilst only 69% of subscribers to daily deal websites had already bought a deal, 96% said they planned to make a purchase in the next 12 months. Much of this growth should come from men, who have not been best served by daily deal sites to date.

Our final prediction is that as a consumer, you’ll find yourself presented with daily deal buying opportunities in a lot more of your favourite places in 2012. Even if you didn’t think this was possible, you’ll soon see your own favourite websites such as local discussion groups and special interest sites re-packaging relevant deals from multiple suppliers in order to monetise their traffic. White-labelling of daily deals will become the trend of 2012.

What are group buying websites?

Posted by on 06-02-2011, under Group buying, Groupon, KGB Deals, LivingSocial, Wahanda

Group buying websites have been around for a couple of years, although they’ve only really reached the mainstream in the last year.

Which are the group buying sites?

The largest group buying websites in the UK are Groupon, LivingSocial and KGB Deals, but there’s also a long list of smaller sites, some specialising in particular locations or particular types of deal (eg Wahanda, who specialise in health and wellbeing). What’s more, Facebook and Google are both launching services in this area, so it’s continuing to grow.

Why is group buying so popular?

Group buying sites put together special deals for their users – which are typically only available for one day – with very attractive discounts, usually at least 40% and sometimes up to 90% off the normal price. The discounts are available because consumers buy together (hence ‘group buying’), earning bulk discounts. Many new and small businesses offer great discounts through group buying sites because it is a good way for them to promote their business to a much wider audience than would normally be possible – helping them to expand.

How do you find out about deals?

To get notified of group buying deals, you’d normally sign up to receive a daily email from each group buying site.

However, this can mean you start receiving daily emails from an ever-increasing list of websites. That’s why Buyometric exists – to cut down on your email clutter and consolidate all the deals you’re interested in into one single daily email.

We also allow you to say ‘no’ to all the types of deal you know you won’t want, by telling us what you do and don’t want to hear about.

How do you pay for deals?

If you see a deal you like, you have to act quickly as the deals expire within 24 hours, or less commonly within a week. You’ll have to enter your credit card details to the group buying site directly, and in return you’ll receive a voucher for the deal which is valid for 6 months.

Obviously if you’re handing over your credit card details to a group buying site, you’ll want to know that they’re not a fly-by-night operation. That’s another great reason for using Buyometric to find your deals. We investigate any complaints or rumours we hear about any group buying website, and if there’s any doubt that they are legitimate, we won’t include them on our site (and will report them to the appropriate authority).*

*Unfortunately we can’t give you any guarantees about any company you may be referred to from our site (and we can’t give you your money back, because we don’t take your money), but we will give you our assurance that we will personally investigate problems and issues you may have with any third party site featured on our site, if you have been introduced to them by us.

Group Buying – The Big 2…

Posted by on 03-02-2011, under About Buyometric, Groupon, KGB Deals

We’re constantly adding new daily deals providers to the site so I wanted to keep you posted on who’s who and our latest additions.

GrouponGroupon and KGB Deals were among the first people to launch their deals with us and as two of the leading names in the daily deals space, provide us with a high volume of deals to present to you. Ranging from restaurants, theatres, spas, stores, experiences and special events, there’s something for everyone.

The more merchants we work with the greater the number of deals that become available and the more chance we have of finding that perfect deal for you.

KGB DealsDon’t panic though – We ensure that by providing you with a tagging system, we can eliminate the deals that really aren’t for you.  So if you don’t want to know about Spa Deals, simply don’t tag “Spas” – problem solved – you don’t receive deals relating to Spas.

Perhaps you’re ONLY interested in teeth whitening. No problem, make sure you ONLY have “Teeth Whitening” tagged and though few and far between, you’ll only receive an email from us alerting you when a great teeth whitening deal is on offer.

I’m sure you’ll love using Buyometric to source great deals, but if you have any problems, please feel free to contact any of us through our blog or email me – a.berry@buyometric.com

check back soon…

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