Daily Deals Sites in the US - Industry Market Research Report

On sale: Amid heavy competition, operators will likely count on the mobile market to entice shoppers

Daily Deals Sites

The Daily Deals Sites industry exhibits a moderate level of concentration, with the top two players, Groupon Inc. (Groupon) and Rue Gilt Groupe, accounting for a significant percentage of industry revenue in 2019. These two companies were among the first to enter the industry and were able to scale and export their business models to additional markets at a much faster rate than their competitors.

Reputation drives revenue growth

- Both Groupon and Rue Gilt Groupe have strong brand recognition and institutional investor backing, which has enabled them to grow their subscribers, as well as their partnerships with businesses. Both of these companies are able to offer a higher volume of transactions to a larger customer base, generating higher purchase rates compared with other smaller, more niche operators. Groupon offers a wider range of products and services, whereas Rue Gilt Groupe specializes in home goods, apparel and certain services offered in select cities.

Consolidation among the largest operators

- Over the five years to 2019, large operators have further secured their place in the industry through the acquisition of other large operators. Most notably, in 2018, Rue La La acquired Gilt Groupe Holdings (Gilt Groupe) from Hudson's Bay Company. Gilt Groupe is also another members-only site specializing in high-end designer apparel for men and women, home goods and other items. Both brands will continue to operate their sites independently, but under the newly formed parent company, Rue Gilt Groupe.

Price and product and service offerings drive competition

- The Daily Deals Sites industry is a highly competitive industry that only has become more competitive with the influx of new operators. Companies compete with each other in regard to their customer base, partnership base, ability to offer a high volume of relevant deals and customer service. Additionally, companies try and differentiate themselves by trying to offer the best discount on products and services in various industries. Another method some daily deal sites use to compete is specialization, whether that is they target a specific market or retail a specific type of product.

This industry includes operators that generate the majority of their revenue through discounts on local goods and services for a limited time frame. Goods sold by the website are given as vouchers that consumers can redeem at local merchants for the physical good or service. Industry revenue comprises the price paid by the customer for the voucher or the coupon after paying an agreed-upon percentage of the purchase price to the featured business.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.