No Sign of Daily Deal Fatigue in the U.S. as Revenue Forecasts Grow

Despite Facebook pulling out of the deals business and questions swirling around Groupon’s pending IPO, the daily deals market is still growing.

In fact, it’s moving so quickly that a research firm that released a report only five months ago is already revising its projections upward for the year.

BIA/Kelsey now believes that consumer spending on deals in the U.S. will hit $2 billion, up from its previous forecast of $1.2 billion.

In a release, the research firm said the growth is being fueled by a larger number of registered users who are actively buying deals, better targeting capabilities and new niches in the space, including flash sales sites, which offer deals on apparel and other categories for a limited time via email.

Calculating spending habits in the space is likely difficult, given that Groupon is the only company that has publicly disclosed its figures in its registration statement.

Mark Fratrik, BIA/Kelsey VP and chief economist, said despite the revisions, the firm sees a ceiling coming “on how many deals consumers will buy and their overall interest levels in deals.”

Because of that, the report was less bullish on the industry’s five-year prospects. The research firm also increased its long-term view on the space, although more modestly, saying that in 2015 it expects spending to hit $4.2 billion, up from its previous forecast of $3.9 billion in March.

Both numbers far exceed the $873 million that the research firm estimates was spent in 2010.

Coincidentally, Groupon said its second-quarter revenues increased to almost exactly that much, or $878 million, which is a worldwide total.


Latest Video

View all videos »

Search »

Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work