The Future of Daily Deal Sites: Mobile, Niche Markets, LBS-style Check-ins?

We’ve covered Groupon.com and other daily deal sites before on our blog, but we’ve never really offered an opinion about the future of these kinds of sites. Can they keep up with the explosive growth rate they’ve seen over the last year? Can they continue offering deals with small local businesses, or will they focus on offering deals with national companies to emulate the success Groupon saw last year with Gap? Will they integrate location-based services-style check-in opportunities for customers? Will they capitalize on specific niche markets to keep consumers engaged? In this post, I’ll tackle some of these questions and provide my predictions for the next evolution of daily deal sites.

unique visitors to groupon.com december 2009 to december 2010

As you can see from the chart above, 2010 saw the meteoric rise of Groupon, going from just under 2 million unique visitors in December 2009 to 15.6 million in December 2010. Part of this upward trend that began in earnest during March 2010 may have had something to do with the release of their iPhone app that made their deals more easily accessible to a wider base of customers. Keep in mind that the traffic we see with Compete.com does not come from mobile devices, but I think making the coupons available to smartphone users on-the-go probably helped to drive people who bought Groupons on the website to then redeem them using their phones. Having these deals available on mobile devices almost surely had an impact on exposing new users to the Groupon site through social channels.

I think, in the future, we will continue to see a push for daily deals on mobile devices. Because of the practical nature of being able to buy and access great deals from anywhere, niche market deal sites will expand more into the mobile market as well (especially given the success Groupon has seen over the last year in the mobile arena). We may even begin to see mobile-driven LBS applications employing daily deal features into the check-in process beyond the specials and perks that are currently offered at some companies for checking-in frequently.

In 2011, I think we’ll also see an even bigger rise in deal sites that cater to niche markets. Though sites like Groupon and Livingsocial have seen explosive growth in recent months, and people will surely continue to use these sites for their eclectic coupon needs, niche market sites like Zulily, Ideeli, and Gilt City will grow from word-of-mouth referrals within the respective, loyal communities that they serve.

unique visitors niche market zulily ideeli gilt city

Deal site Woot.com is a great example of how I see the future of daily deals. Woot started as a site that offered one product every day at a great price, and have since grown into the segmented site we see today that includes Shirt Woot, Wine Woot, Kids Woot, and Sellout Woot. While the group-buying principle does not apply to Woot, I think we can draw comparisons in that we will eventually see sites like Groupon create niche spinoff sites to capitalize on high consumer interest in specialty markets like wine, shirts, and products focused on kids.

woot.com screenshot

*image source Woot.com

At the end of the day, we’re left with speculation and some more questions: will mammoth deal sites like Groupon and LivingSocial enter into the niche market by segmenting their sites into multiple categories of daily deals? Will LBS applications like FourSquare and Gowalla integrate daily deal-like features in an attempt to enter into that market? Stay tuned for next week’s post about how LBS applications could impact the daily deal space.

Do you have thoughts or predictions for how daily deal sites will continue to evolve? Let us know in the comments!

About Jared DeLuca:
Jared is currently the Associate Digital Marketing Manager at Compete (Millward Brown Digital). He is a graduate of Northeastern University, having achieved his B.A. in Communication Studies. If you like what you read, you can connect with him on Google+, Twitter, or on LinkedIn.