A Banner Black Friday for Some Disappoints Groupon and Other Daily Deal Providers

Groupon and the other daily deal providers saw sales tank during the week of Thanksgiving, unlike traditional retailers, which reported robust sales surrounding the holidays.

Daily deal industry tracking firm Yipit reports that the daily deal industry in North America experienced marginal growth in November, as the major sites were adversely affected by the Thanksgiving holiday.

The number of deals offered increased only 1 percent while total industry gross billings grew by 2 percent during the month.

The largest provider, Groupon, saw the biggest decline.

Groupon grew 6 percent in November, but experienced a double-digit decline during the Thanksgiving holiday week.

Yipit bases its estimates on the sales of vouchers, which it tracks closely. Although Groupon no longer reveals exact sales data on its site, Yipit maintains that it is still able to make fair predictions based on historical data and industry insights.

The daily-deal declines were in stark contrast to the Black Friday experience of online retailers, which saw sales increase to $816 million on the day after Thanksgiving. ComScore said it was the heaviest online spending day to date in 2011, representing a 26 percent increase over the same day in 2010.

The holiday declines occurred despite ambitious programs by both Groupon and LivingSocial, which tried to take advantage of the heavy retail season.

Groupon stepped up its marketing efforts through “Grouponicus,” a holiday shop selling local gifts, deals and travel getaways.

LivingSocial’s Black Friday efforts included offering deals for 20 national brands, including gift cards from Electronic Arts, OfficeMax, Verizon Wireless, Skype and BlueNile.com. LivingSocial even launched a national TV campaign and radio spots to promote the deals.

But Yipit says those efforts didn’t pay off.

For the seven-day period ended Nov. 28, LivingSocial’s gross billings were down 30 percent and 19 percent compared to the two previous periods. And, because of the lower-priced national deals, the average size of its deal price fell to $28 in November from $32 a month earlier.

Yipit did not try to explain why the drops occurred around the holidays, except that they are similar to other periods, such as the Fourth of July.

But the patterns could be compared to social gaming space, which saw its usage sink during the holidays because people were not at work.

A secondary factor may be that more traditional retailers are known for Black Friday offers for others, while daily deals have historically been looked at as items you buy for yourself, and are not necessarily thought of as gifts.

Finally, Yipit said following Groupon and LivingSocial, Travelzoo, AmazonLocal and Google Offers ranked as the third, fourth and fifth largest national providers in November.

No word yet on how daily deals performed in the lead-up to Christmas in December.

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