While restaurant daily deals bring about several advantages for the restaurateurs, there are also disadvantages that may dissuade them from group buying discounts or daily deals, suggests the Cornell Hospitality Report. The research was conducted to ascertain the customers responses to social couponing.
Cannibalization, cost swelling, and displacement of frequent foodies may prove the demerits of discount promotions. On the other hand, new customers, customer awareness, and rewarding flights from lean periods are the undeniable merits of daily deals.
Why did the academic research focus on restaurant category of the daily deal industry is markedly because of the popularity of food deals amongst deal seekers.
The survey questionnaires were put before the US consumers who bought the deals in past three months. Questions consisted of which ones use restaurant daily deals, what they think about such deals, how they use them, and whether they intend to return to the restaurant in the future.
Not all users used generic group buying sites such as Groupon and LivingSocial to fetch dine-out deals. Rather, Restaurant.com, OpenTable, Spotlight, and Savored also remained major sources of collecting social coupons.
It is important to note that group buying model is not followed uniformly in the couponing field. For example, LivingSocial that is next to online group buying pioneer Groupon has morphed its model by now offering one voucher free for bringing three leads to a daily deal seeker.
This particular fact is related to the findings of the research that found out nonusers as market mavens who, though didnt use specials, love to break news of hot deals in town. Now, they would be paid for this information sharing services.
Demographical characteristics of the respondents included 43 per cent belonged to the age group of 25 to 44 years, 38 per cent raised average income in the bracket of $50,000 and $100,000, and 59 per cent of them were female.
Nearly half of bargain hunters bought deals for casual restaurants; 32 per cent for fast casual restaurants; and six per cent for fine dining. Most of them used vouchers to take in meals with their families.
While the research concluded that 48 per cent daily deal buyers were new customers referring to Technomic to bear out the fact of new customer generation capacity of the deals, yet it highlighted the cannibalization that occurred when discounted meals militated against the normal price tags. 53 per cent of deal users bought deals because of the past experience. There is a higher possibility of conversion of frequent buyers into diehard bargain hunters.
Restaurant operators get dissatisfied with the performance of couponing sites, which pitch them to devise deal of the day for mutual benefits, when the deals go live before and after a given time.
Restaurant operators were not satisfied with the performance of daily deals. Just over half (55.5 per cent) of businesses surveyed in the Dholakia study reported that they made money on the daily deal, and 48.1 percent stated that they would participate in a daily deal promotion again in the future.
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Article Added on Tuesday, March 6, 2012
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