Do daily deals really deliver?
Retailers aren't seeing repeat customers as a result of their online deals, and shoppers are experiencing buyer's remorse due to impulse deal shopping.
Wed, May 30 2012 at 2:36 PM
Photo: Scott Olson/AFP
Have you ever jumped at an offer from a daily deal website and made an impulse buy that you later regretted? If so, you’re not alone, a Kansas State University professor says. In fact, your buyer's remorse is often matched by seller's remorse as more and more retailers reconsider the value of offering steeply discounted daily deals.
Daily deal websites and flash sale websites often offer prices well below what would be seen in a retail store or through typical online shopping. But Esther Swilley, assistant professor of marketing at Kansas State University, says the deals may not be so good for business and that consumers may regret their impulse buying.
"I would advise users to use discretion," Swilley said. "Make sure it's something you really need or want, and you're not just purchasing it because it's there and time is counting down. You may see a pair of shoes that is marked down to $500 from $1,600. Yes, it's a discount, but would you have seriously considered an expensive pair of shoes if the picture wasn't in front of you?" [Does Brand Love Spark Separation Anxiety?]
Daily deal websites like Groupon and others operate the same way regular coupons have for years, Swilley said. Businesses offer a service or product at a discount in order to bring in new customers, with hopes that they will enjoy what they purchased and return for more. But that's not happening with nearly the regularity that retailers had hoped it would.
"What's happening, though, is that people aren't coming back after that initial coupon use," she said. "They think, 'this was cheap the first time, I want it to be cheap again.' They're not really gaining a true customer, but simply a one-time user who is deal-prone. Now retailers are reconsidering the value of Web coupons."
Reach BusinessNewsDaily senior writer Ned Smith at email@example.com. Follow him on Twitter @nedbsmith.
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