business news in context, analysis with attitude

The Associated Press reports that things are good in the deal-a-day business - their needs are so great that many of them can’t hire enough people on a weekly basis.

According to the story, “Deal-a-day websites blast email offers for deep discounts, sometimes good for only a few hours. And they’re becoming so popular that their offices are starting to look as crowded as their subscribers’ inboxes.

“In just three years, the business model has changed local advertising, delivering faster results than other marketing methods. Store owners get immediate revenue and can see exactly how many customers an offer brings in.”

How much as it changed?

“The sites are expected to generate $2.7 billion in revenue this year, more than doubling from last year, according to Local Offer Network, which collects and distributes deals from hundreds of sites. The daily-deal market could reach $4 billion by 2015, says Mark Fratrik, vice president at marketing research firm BIA/Kelsey. While that’s a small slice of the $142 billion in online retail sales, daily-deal revenue is growing much faster than overall e-commerce.”
KC's View:
I have no idea if the Groupon / Living Social phenomenon is a temporary bubble, or if it is a long-term and sustainable trend. But at the very least, retailers in all venues need to be aware of the disruptive influence it is having on the marketing biz.