Is the daily deal craze dying off in New York? Looking at the picture from merchants’ angle, New York deals are something that make them cross verify actual results and internal rate of return promised by the deal makers. Contrastingly, consumer appetite for discounts is insatiable giving a strong reason of existence to deals-a-day sites.
Given the numbers of group buying sites serving the New Yorkers, it is being widely deduced that the market has been oversaturated. According to LocalDealSites.com, there are 40 deal makers operating in the metropolis.
Merchants have started to reassess the benefits of running heavy discounts. Not generally, but discount throwers on group buying sites are casting doubts over the brand loyalty factor of daily deals. For them, contrary to the claims of daily deal sites brand loyalty is not inevitable. Consumers come to fetch discounts and when anyone else comes there, “then they would get another coupon and do it with someone else,” Wellpath’s director, Jennifer Bengel, told New York Times. “There was no loyalty,” he dismayed.
What to commiserate with Wellpath, a well-developed spa saloon at Madison Avenue, when service providers as a whole do not find the idea of drumming up customers from the conduit of daily deal portals.
Actually, “goods are very well suited to daily deals,” said Greg Sterling, an analyst at Opus Research. “People love saving money on products and are quite comfortable with ecommerce for the most part. It could be a very successful product for them,” he observed talking to the Financial Times.
Brand loyalty is one thing, but local daily deals magnify the brand awareness in public, incontrovertibly. Recognition is itself a feat for merchants operating at small scale. Couponing websites are the popularly recognized mode of advertisements cum sale. From DoubleTakeDeals, DoodleDeals, and GoDailyDeals, to DealOn, all daily deal sites partner with local retailers to offer discounts to consumers in the Big Apple.
Veteran journalist David Streitfeld wrote in an NYT report, dozens of deal a day sites are opting in reorganizing, restructuring, and merging to tide over fatigue in the markets. Of course, that is not consumer market that is giving up desire of purchase on vouchers, but he tried to prove that merchants were getting disappointed on the opportunistic consumer behavior.
The writer rightly observed that merchants were misinformed that they would enjoy repeat sale. And, contradiction is obvious while consumers are told that they would have half off and don’t need to shell out actual money.
Heavy discounts seem to be dwarfing merchants and that’s what is making them to move back. Local daily deals have limited market to serve as compared to national deals. Therefore, generosity in concessions can backfire. Instead of increasing sale volume, such discounts may hurt bottom-line of the companies.
Being a command centre, New York City relays signals of current happening in the discount market and local deal a day sites should pay heed to changing reality and emerging trends in the US populous city.
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Article Added on Tuesday, February 14, 2012
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