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Flash in the pan – Daily deal sites dying out

The relatively new phenomenon of flash sales and ‘money-off’ coupon sites (that now account for a large amount of internet spam) may be dying a sudden death.  Moneyland.time.com reported that one third of daily deal sites have disappeared in the last year and with them, the end of cut-price spa deals.

There are very few things to thank the recession for.  That ‘career break’ you’ve always wanted and were unceremoniously forced to have is one.  Daily deal sites are the other.  Not a cloud has passed since the globe’s financial meltdown that hasn’t been silver-lined with half-price curry, on a Tuesday night at a restaurant you’d never go to even if you lived anywhere near it.  The amount of savings to be had were a wondrous thing and we couldn’t believe how generous businesses all over the world were being in exchange for a little PR and the chance of a little repeat business (at full price).  Well the penny has finally dropped, with shops and restaurants realising that the internet has probably cast their advertising net a little too wide for little in return.

Some smaller businesses have been unable to cope with the large amount of orders, never mind the fact that they are basically ‘giving’ their stock away with on-going markdowns.  The cost of running a deals website is also spiralling out of control, with companies like Groupon and Livingsocial expanding their sales staff year on year to keep up with the large number of deals necessary to maintain market interest and provide administration for all the offers.  According to a deal customer survey on Moneyland.time.com, ‘40% of those surveyed said they were already frequent customers of the company, and another 26% classified themselves as “infrequent” customers’, so there is a substantial amount of customers who are using deals for the sake of the savings rather than an introduction to the business.  This also means that existing customers who would have been willing to pay full price are saving while the business may be suffering.

Larger companies and would-be investors are quickly pulling out of the daily deal business too.  A spokesperson for Facebook said the company ‘would be better served focusing on other core social experiences instead of daily deals’ after deciding not to go ahead with that branch of its business last year.  So, in the spirit of the flash sale world – Get it while it’s hot – because there may not be many options in the future.


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