A report from Rice University suggests that Groupon,and similar voucher / discount sites, may be facing tough times in the future, as they aren’t generating enough repeat business from retailers to support growth.
Associate Professor of Management at Rice University, Utpal Dholakia
“The major take-away from the study is that not enough businesses are coming back to daily deals to make the industry sustainable in the long run, and our results from three studies and close to 500 businesses surveyed show that the deals are nowhere close to the rates of financial success for participating businesses that some companies claim to be having.”
Key findings from the study:
- 21% of deal buyers never redeem the vouchers they’ve already paid for.
- 55% of businesses reported making money, 26.6 percent lost money and 17.9 percent broke even on their promotions.
- 48% of businesses indicated they would run another daily deal promotion, 19.8 percent said they would not and 32.1 percent said they were uncertain.
Click the source link for the press release, and more information.
Source: Rice University — Forecast: Tough times ahead for daily deal sites