February 8th, 2011There is a surge of deal sites on the internet and I don’t think it’s a good thing for businesses. Groupon, LivingSocial, Facebook Deals, Google Offers, Woot, Gilt Group and on and on, all get too much credit for the services they provide: It’s not that hard to give stuff away for cheap on the internet where spreading information is as simple as a click. Retailers have gotten caught up in all the promotion hype of these businesses and have trained customers to be very price sensitive and to not buy anything until it’s on sale. I’m very skeptical of whether these flash sales and deal networks really add value to the business: sure they are getting a ton of volume quickly but are they getting more customers? It’s my opinion that the people who use these deal sites could care less about being return customers and are more interested in jumping to the next business that gives them a deal. Take a look at the growth of the query Coupon Code from Insights for Search:
From a study posted on the Google Retail Blog: 25%, the majority, of people who “Like” brands on Facebook do so for discounts.
The amount of people researching online before they buy is going up: one study shows “58% of Americans now reporting that they perform online research concerning the products and services that they are considering purchasing,” and another says, “34% of customers research online and then went to the store to purchase the products.” The more prolific these deal sites become the easier people doing their research will find them and the harder it will be for a company to sell something at full price.
Entry Filed under: Internet Marketing