Daily Deal Sites Research Articles

An exploratory study of daily deal sites and its impact on consumers’ impulse buying behavior – application of the technology acceptance model

ABSTRACT This article presents the impact of daily deal sites (e.g., discounted price and convenience) on consumers' various perceived values, and how these values affect consumers' impulse buying decision throughout their impulsiveness. Technology Acceptance Model was applied to build the conceptual model of this study. Online consumers who have used restaurant deals are the primary target population. From Amazon M-Turk service, 468 usable responses were collected. Structural Equation Modeling is developed for data analysis. The results indicate that convenience significantly affects consumers' two perceived values (perceived ease of use and perceived enjoyment), which in turn, influences consumers' impulse buying decision. Furthermore, the results show that the consumers' impulsiveness significantly influenced their impulse buying decision. The results of this study provide a new theoretical perspective to expand on online consumers' impulse buying behavior by validating the impact of the interface of technology and online shopping tools. The finding also provides a practical understanding of the wide range of consumers' perceptions of impulse buying by assessing the influence of each motivational factor using 'restaurant daily deals’.

Effects of Reputation on Daily Deal Promotions: Evidence from Groupon

Daily deals are nowadays very popular. As a new form of marketing, they allow local small businesses to sell vouchers at substantial price discounts for a very limited period of time. However, it is unclear whether and to what extent a seller’s online reputation affects the outcomes of its daily deal promotions. This paper presents an analysis of 4060 daily deals scraped from Groupon. The empirical results suggest that (1) business reputation, measured by displayed average rating, is positively associated with the sales of vouchers; (2) business reputation has no significant relationship with voucher discount depth; (3) business reputation is positively associated with the increase of customer traffic following a daily deal promotion; and (4) ratings displayed on daily deal sites are more influential than ratings displayed on third-party review sites. These findings extend our understanding of daily deals and provide concrete guidance to merchants regarding how to attract more purchases and traffic through online deals as well as to platform owners by pointing out the value of reputation in moderating consumers’ and merchants’ behaviors.

Electronic Markets and Geographic Competition Among Small, Local Firms

We study the impact of electronic markets on small, boutique firms selling presence goods or services—goods or services that must be consumed at the selling firm’s location. These firms have recently begun to compete on electronic markets by selling goods and services through local daily deal sites, such as Groupon and LivingSocial. We extract publicly available activity and spatial information from Groupon, LivingSocial, Google Maps, and Flickr to construct a unique panel data set to study daily deals offered by restaurants and spa vendors in geographical clusters of concentration in 167 distinct cities. This data set allows us to examine the effect of location on the competition vendors face in electronic markets. We find that as vendors in a particular geographical cluster participate in electronic markets, local competition increases and other vendors in that cluster join the electronic market and deepen discounts in response. However, vendors in other clusters in the same city remain relatively unaffected. We further analyze vendor ratings from Yelp and other infomediaries, to show that lesser known and low-quality vendors utilize the advertising effect of electronic markets to increase their awareness among customers. We further test the moderating effect of horizontal and vertical differentiation among firms in geographical clusters on competition in electronic markets, using measures extracted from UrbanSpoon.com. We find that clusters having lower differentiation experience higher competitive effects of firms joining the electronic market. Our findings provide empirical validation of the analytical results in existing literature in an important and understudied context: competition among small businesses selling presence goods and services. Our results have implications for firms and electronic market platforms. The online appendix is available at https://doi.org/10.1287/isre.2017.0754 .

Electronic Markets and Geographic Competition among Small, Local Firms

We study the impact of electronic markets on small, boutique firms selling presence goods or services – goods or services which must be consumed at the selling firm’s location. These firms have recently begun to compete on electronic markets by selling goods and services through local daily deal sites, such as Groupon and LivingSocial. Previous research has shown that electronic markets make transportation costs less relevant in determining competition among firms selling goods and services that can be consumed at the consumers’ location. However, consumer transportation costs to the firm’s location remain relevant for competition among those selling presence goods. Due to lack of data for such firms, it has been difficult to empirically examine the competition among them. We extract publicly available activity and spatial information from Groupon, LivingSocial, Google Maps, and Flickr to construct a unique panel dataset to study daily deals offered by restaurants and spa vendors in geographical clusters of concentration in 167 distinct cities. This dataset allows us to examine the effect of location on the competition vendors face in electronic markets. We find that as vendors in a particular geographical cluster participate in electronic markets, local competition increases and other vendors in that cluster join the electronic market and deepen discounts in response. However, vendors in other clusters in the same city remain relatively unaffected. We further analyze vendor ratings from Yelp and other infomediaries, to show that lesser known and low quality vendors utilize the advertising effect of electronic markets to increase their awareness among customers. We further test the moderating effect of horizontal and vertical differentiation among firms in geographical clusters on competition in electronic markets, using measures extracted from UrbanSpoon.com. We find that clusters having lower differentiation experience higher competitive effects of firms joining the electronic market. Our findings provide empirical validation of the analytical results in existing literature in an important and understudied context: competition among small businesses selling presence goods and services. Our results have implications for firms and electronic market platforms.

Strategic Revenue Sharing with Daily Deal Sites: A Competitive Analysis

ABSTRACTPromoting through daily deal sites has become popular in the past few years. Groupon is perhaps the best known provider of these promotions (also known as online discount vouchers) to customers. Daily deals differ from traditional coupons on three important dimensions: (i) They are not offered to consumers directly by firms but are offered through an intermediary, (ii) the promotional depth offered by these localized promotions tends to be higher, and (iii) consumers prepay for the discount vouchers, and then the daily deals site reimburses the retailer a prespecified negotiated percentage of each paid voucher. In this study, we build a theoretical model to explore the profitability of undertaking a daily deals campaign by firms. Our analysis identifies the role of types of consumers in the market, relative bargaining power of the local firms, revenue sharing agreements, and market characteristics, such as degree of product substitutability and extent of competition, on the profitability attained through daily deal promotions. Surprisingly, when demand spillovers exist, an asymmetric outcome, with one firm offering an online discount voucher and the competing firm not offering an online discount voucher, is an equilibrium under some conditions.

Is the Daily Deal Social Shopping?: An Empirical Analysis of Customer Panel Data

Shortly after Groupon started its business in 2008, selling one deal a day with substantial price discounts, daily-deal sites became new online shopping places for many people. Starting with Groupon, most daily-deal sites required that voucher sales be higher than a predetermined number before deals become active. This feature, known as the “tipping point,” was a unique characteristic of the daily-deal business and is identified as one of the most prominent features of social shopping. Most daily-deal sites also required that a redemption period start after a deal was over and be fixed, usually 90days, presumably to maximize the promotional effect of deals by encouraging rapid voucher redemption. The question remains, however, whether such features actually contributed to the success of the daily-deal industry. Using individual-level panel data from a major daily-deal site in Korea, we analyze whether consumers' purchase and redemption behaviors were affected by these features and how consumers changed their behaviors as they continued to purchase and redeem vouchers over time. We find that the presence of the tipping point did not boost voucher sales and likely deterred new customers from buying deals right away. We also find that new customers tended to redeem their vouchers quickly, and this likely caused the small businesses that offered deals to become overwhelmed. It is not surprising, given our findings, that both Groupon and the Korean daily deal site abandoned the use of the tipping point and modified redemption rules.

Do Coupons Expand or Cannibalize Revenue? Evidence from an e-Market

We empirically study the effectiveness of a popular attempt to increase a firm's sales and customer base: the use of coupons. We develop a model of consumer demand to ask whether firms can indeed use coupons as a means to price discriminate by attracting new consumers without losing (cannibalizing) revenue from existing ones, and whether these consumers return to the firm after the price promotion. In addition, we ask what types of businesses are most likely to benefit from such promotions. We use a novel method to connect demand for e-coupons through daily-deal sites with regular firm sales. We find that offering a coupon increases demand both during and after the promotion, suggesting that coupons can be used both to price discriminate and to advertise. Still, while coupons increase profits on average, the effect on each firm's profits depends on the type of firm.

Buying Behavior on Daily-Deal Sites: The Role of Face Value, Product Involvement, Information, and Website Quality

The aim of this research is to identify factors that may have an effect on e-voucher sales, in the context of daily-deal sites. While previous research has focused on purchase intentions as the dependent variable and on fictitious coupons and/or brands, this article extends previous work by investigating what actually impacts vouchers sales, using real voucher data, as basic research units of analysis. Using content analysis, researchers analyzed 596 vouchers from different daily-deal websites. Taking the inherent capability of Bayesian Networks for reasoning under conditions of uncertainty into account, a series of learning and simulation processes reveal the influential degree that website and information quality, face value, and product involvement exert on vouchers sales. The results of the study provide management with specific guidelines for setting the right prices in vouchers and designing effective promotional messages.

Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey

Abstract: Daily deal sites have become so popular in Turkey just as they have in many other countries. Heavy discounted offers for products or services attract most of the people to these new marketplaces. Glancing over the offers before starting to work became a habit for some of the people. However, some others do not have any interest to daily deals. So, it can be said that behavioral differences are unavoidable among customers. There are different forces that initiate the buying process. In this study, factors that affect buying behaviors of people from daily deal sites are investigated. The effect of buying behavior on satisfaction is also examined. Price related constructs (price consciousness, price mavenism, sale proneness and coupon proneness) and impulse buying tendencies of customers are taken as predictors of buying behavior from daily deal sites. Results suggest that price mavenism and coupon proneness are positively related with buying behaviors from online daily deal sites. On the other hand satisfaction come about to be a positive result of buying behavior. Even though the focus of this study is specific to a limited group, it is envisaged that the results will provide insights for both academics and e-tailers. Keywords: Daily Deal Sites, Online Shopping, Turkey, Structural Equation Modeling. JEL Classifications: M31, M10

Consumers' Motivations and Daily Deal Promotions

In the last years daily deal (dd) sites have become a substantial part of e-commerce scenario. Every day, for a limited time, such sites offer their subscribers, at very discounted prices, deals for products or services. Despite the worldwide success of daily deal sites, testified by articles in newspapers and magazines, there is an almost complete absence of academic research on this topic. The aim of this paper is to understand the consumers' drivers in online coupon buying. The study is exploratory in nature and authors have collected data by carrying out four synchronous online focus groups involving 21 participants and investigating five areas: level of awareness, perception area, social dimension, consumer behavior, and relationship with e-commerce. Respondents show a high level of awareness of daily deal sites. In the perceptive area, convenience emerges as the driving factor in coupon buying. As to the self-perception area, some ambivalences emerge between smartness and compulsive buying, highlighting also some dissatisfaction. The ‘social dimension’ is almost irrelevant, and as to consumer behavior, daily deal buying seems to be a kind of fashion. Consumers perceive the bargain side of the offer, behaving like “cherry pickers.”

Deal me in! Assessing consumer response to daily-deal sites

Daily-deal websites, such as Groupon and LivingSocial, have become increasingly popular in the USA. This research applies a theoretical model, the Theory of Planned Behaviour, to consumer use of daily-deal websites. An online survey was fielded among 502 US social media users. Structural equation modelling was used to test the proposed model. Consumers’ attitudes towards the use of daily-deal sites, their perceptions regarding referent approval, and their self-confidence regarding their ability to use social media effectively all positively affect their intentions to use daily-deal sites. Neither brand consciousness nor advertising scepticism significantly affected attitude toward the use of daily deal sites, however information seeking behaviour did positively and significantly impact attitude. This suggests that consumers are open to trying new brands while at the same time wanting clear and concise information about the daily deal offer before making a purchase.

Mox Deals Vietnam: The Fight of Daily Deal Sites

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Regulatory Focus and Daily-Deal Message Framing: Are We Saving or Gaining With Groupon?

Daily-deal sites such as Groupon and Living Social have seen explosive growth over the past few years, but many firms are struggling to craft effective messages that will appeal to consumers’ deal-seeking motivations. This study examines the cognitive process by which consumers interpret offers, specifically the interaction between regulatory focus and message framing. Two experiments suggest that matching regulatory focus (emphasizing nonloss for prevention-oriented individuals and gain for promotion-oriented customers) strengthens persuasion. Furthermore, the results indicate that different mechanisms operate for individuals with different chronic regulatory foci: prevention-oriented consumers tend to centrally process daily-deal offers with both compatible (prevention) and incompatible (promotion) message frames. The findings contribute to the theoretical understanding of regulatory compatibility by applying it to the online daily-deal context. In addition, it provides compelling evidence for marketers that the effectiveness of daily deals can be improved by matching the framing and arguments to different customer segments.

Signaling Effects of Daily Deal Promotions

Daily deal sites like Groupon and LivingSocial have been growing at an impressive rate. These sites provide merchants a new channel to advertise. A question is that if daily deals can help a merchant to signal its good quality. To answer this question, we present a signaling model, in which the discount level is a choice variable of a merchant who offers a product on a daily deal site, and may be used as a signal for the initially unobservable quality of the product. Repeat purchases and commission charged by the daily deal site play crucial roles in our model.

Does a Daily Deal Promotion Signal a Distressed Business? An Empirical Investigation of Small Business Survival

In the last four years, daily deals have emerged from nowhere to become a multi-billion dollar industry world-wide. Daily deal sites such as Groupon and Livingsocial oer products and services at deep discounts to consumers via email and social networks. As the industry matures, there are many questions regarding the impact of daily deals on the marketplace. Important questions in this regard concern the reasons why businesses decide to oer daily deals and their longer-term impact on businesses. In the present paper, we investigate whether the unobserved factors that make marketers run daily deals are correlated with the unobserved factors that inuence the business, In particular, we employ the framework of seemingly unrelated regression to model the correlation between the errors in predicting whether a business uses a daily deal and the errors in predicting the business’ survival. Our analysis consists of the survival of 985 small businesses that oered daily deals between January and July 2011 in the city of Chicago. Our results indicate that there is a statistically signicant correlation between the unobserved factors that inuence the business’ decision to oer a daily deal and the unobserved factors that impact its survival. Furthermore, our results indicate that the correlation coecient is signicant

How Businesses Fare with Daily Deals: A Multi-Site Analysis of Groupon, Livingsocial, Opentable, Travelzoo, and BuyWithMe Promotions

We examine performance of daily deals run through five major sites in 23 US markets. In a survey-based study of 324 businesses that conducted a daily deal promotion between August 2009 and March 2011, 55.5% of businesses reported making money, 26.6% lost money and 17.9% broke even on their promotions. Although close to 80% of deal users were new customers, significantly fewer users spent beyond the deal’s value or returned to purchase at full price. 48.1% of businesses indicated they would run another daily deal promotion, 19.8% said they would not, and 32.1% said they were uncertain. We also examined drivers of deal profitability, the loyalty of merchants to a daily deal site, and how spending on daily deals has affected spending of businesses on other marketing programs. Overall, our findings lead us to conclude that there are relatively few points of differentiation between the daily deal sites, making it harder for any one site to stand out from the others. Our findings also uncovered a number of red flags regarding the industry as a whole: (1) the relatively low percentages of deal users spending beyond the deal value (35.9%) and returning for a full-price purchase (19.9%) are symptomatic of a structural weakness in the daily deal business model, (2) less than half of the businesses indicated enthusiasm about running another daily deal in the future, (3) fully 72.8% indicated openness to considering a different daily deal site, and (4) only 35.9% of restaurants/ bars and 41.5% of salons and spas that had run a daily deal asserted they would run another such promotion in the future. All of these findings point to the same conclusion: Over the next few years, it is likely that daily deal sites will have to settle for lower shares of revenues from businesses compared to their current levels, and it will be harder and more expensive for them to find viable candidates to fill their pipelines of daily deals.

Daily Deals: A Good Marketing Tactic for SLPs and Audiologists—or Not?

You have accessThe ASHA LeaderMake it Work1 Jun 2011Daily Deals: A Good Marketing Tactic for SLPs and Audiologists—or Not? Maggie McGary Maggie McGary Google Scholar More articles by this author https://doi.org/10.1044/leader.MIW.16062011.np SectionsAbout ToolsAdd to favorites ShareFacebookTwitterLinked In http://www.asha.org/Publications/leader/2011/110517/Daily-Deals--A-Good-Marketing-Tactic-for-SLPs-and-Audiologists-or-Not.htm Heard of Groupon or LivingSocial? Chances are, if you haven't heard about these “daily deal” websites or others like them, you probably will soon. As restaurants and other businesses have reaped the benefits of daily deals, other kinds of businesses have started to show interest in the concept for marketing their services—notably, medical services like dental exams and cosmetic surgical procedures. It's only a matter of time until daily-deal sites begin promoting their services to other kinds of medical providers, including speech-language pathologists and audiologists. According to a recent Harris Interactive survey, approximately 23 million Americans purchased deals from daily-deal sites in 2010. U.S. consumer spending on daily-deal sites is expected to reach $1.25 billion this year, up from $873 million in 2010. That's a lot of sales and a high volume of potential repeat business, for little or no up-front investment. There is typically no up-front cost to businesses advertising on deal sites—usually the deal site takes 50% of the purchase price for all deals sold. For instance, in the case of a typical restaurant deal offering a $50 gift certificate for which the consumer pays $25, the deal site keeps 50% and the restaurant earns 50%. Luke Barber (homespeechhome.com) is a speech-language pathologist who also is involved with a family business that happens to be a daily-deal site. As Barber sees it, daily-deal sites could be a great way for SLPs or audiologists to market their practices or services—or a potentially risky marketing tactic. “From an SLP or audiologist's point of view, group deals could be fantastic because of the potential for repeat business. For a private-practice clinician to offer, for instance, a speech-language evaluation for half off is brilliant because of the potential for future business.” Barber elaborated that another potential area for daily-deal marketing could be telepractice—such deals could be great on national sites because they're not limited by geographical area and could potentially draw clients from many areas. There are many different deal sites, each with different target audiences—for instance, Plumdistrict and Mamapedia are two sites that target parents. There also are many local deal sites, which Barber said would work best for on-premise treatment. Alexandra Costlow, a second-year audiology doctoral student at the University of Maryland, pointed out that daily deal sites also could potentially be a good way to raise awareness about audiologists among younger people (68% of Groupon's subscribers are 18–34 years old). Group deals also could be a way audiologists could promote special deals or events during Better Hearing and Speech Month. But just as there are possible benefits to daily deals as a marketing tool for SLPs and audiologists, both Costlow and Barber point out some significant drawbacks. The ethical quicksand around discounting speech or hearing services is notable—ranging from current clients complaining that they're paying more for the same services being advertised at a discounted rate to potential health insurance or anti-kickback law issues. If one of the main benefits of group deals is garnering new clients who you hope will become repeat clients, clinicians should know that the conversion rate from one-time daily-deal customer to repeat customer is low—the current estimate for conversions is around 19%. With repeat business already a known issue, will new clients reeled in by a group deal expect to pay that discounted rate for future visits? Also, even the best-case scenario of group deals could be troublesome for solo practitioners inundated with clients who purchase a deal, a common complaint of small businesses that have offered mass discounts through daily-deal sites. Although daily deals make sense for restaurants and other entertainment venues or products, the risks involved in using them as a marketing tactic for SLPs or audiologists are considerable. Clinicians are cautioned to think carefully about the implications of offering discounted services, especially as it relates to contracts with private or public insurers if contracts include stipulations about providing the best price for services. Author Notes online ASHA community and social media manager, can be reached at [email protected]. Advertising Disclaimer | Advertise With Us Advertising Disclaimer | Advertise With Us Additional Resources FiguresSourcesRelatedDetails Volume 16Issue 6June 2011 Get Permissions Add to your Mendeley library History Published in print: Jun 1, 2011 Metrics Downloaded 88 times Topicsasha-topicsleader_do_tagleader-topicsasha-article-typesCopyright & Permissions© 2011 American Speech-Language-Hearing AssociationLoading ...