The Death of Daily Deals and Digital Coupons?

Industry View: Innovation in Digital Coupons has Just Begun

Groupon’s “stutter-step IPO.  A drop in traffic to their site, and to Living Social’s.  Facebook’s abrupt about face in the daily deal segment.  Yelp’s downsizing.  These recent events have left many claiming that the best days of the digital coupon are now behind us.  They cite consumer fatigue with coupons, merchant dissatisfaction with the experience as a customer retention tool and the proliferation of daily deal providers offering coupons of marginal interest. But the “panic headlines” are just that. Far from exiting its golden age, recent reports show what we in the industry already know – the best days of digital coupons are still ahead.  This is market space that is just beginning to go mainstream.

A recent study by Rice University found that the heaviest daily deal users are quite enthusiastic about continuing to “play” and that a large percentage of consumers have not even tried daily deals yet.  Research firm BA/Kelsey revised their projections on consumer spending on daily deals upward to $4.2 billion in 2015 up from $873 million in 2010.

Like all new platforms, the consumer adoption curve will accelerate in concert with the perceived value of the experience.  (Think iTunes, think videogames.)  Digital coupons will continue to experiment and evolve until the dominant model emerges.  And in the case of digital coupons, the dominant model that is needed is one that will engage consumers in authentic ways in the stream of their daily lives.

Coupons – traditional and digital – and have at their core the ability to help retailers and merchants engage consumers in long term relationships – not just fleeting one-off promotions.  Comprehensive acquisition, retention and loyalty marketing programs build eco-systems, networks of networks for coupon users and providers.  Entertainment.com for example has over 70,000 local merchants, national retailers and major consumer brands repeatedly accessing our online, print and mobile platforms to reach millions of consumers in 150 market areas every day.

The research shows that consumer interest in deals is far from over – given the reset in our global economies it’s just beginning. It’s a new paradigm for some and that’s just fine. And it’s up to the major players in the industry to galvanize that demand with better models that will help spur the true Golden Age of digital ‘coupons as communication and community builders’ that still lies ahead…a place where there is plenty of runway for innovation.

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Dean DeBiase is the Chairman and CEO of entertainment.com, the leading provider of the most recognized and purchased consumer discount, promotion and coupon service. He is known as an expansion phase CEO with a track record scaling emerging growth companies and embedding entrepreneurial-grade talent into multi-national corporations. He’s a co-author of the best-selling The Big Moo.