Rice University expert available to discuss the uncertain future of daily deal sites

David Ruth
713-348-6327
druth@rice.edu

Amy Hodges
713-348-6777
amy.hodges@rice.edu

Rice University expert available to discuss the uncertain future of daily deal sites

As Facebook and Yelp announce plans to trim their daily deal services, Rice University’s leading researcher of daily deal companies, Professor of Management Utpal Dholakia, is available to discuss what the future holds for the once-hot industry.

”I think Groupon has an incumbent’s advantage on both sides of the transaction,” said Dholakia, who has authored several studies on the deal-of-the-day website. ”On the consumer side, it has significantly higher awareness and usage rates in virtually all markets it operates in when compared with its competitors. On the merchant side, vendors are much more comfortable with it and know what to expect based on their own previous experiences and those of others in the market. In line with this, I have heard from multiple other Groupon clones that they are having difficulty recruiting merchants to run offers on their sites. I expect this trend only to continue.”

Dholakia also said daily deal companies are evolving. They are moving from deep across-the-board discounts on products and services to “smart” discounts, where merchants offer discounts that are contingent on a particular combination of products or services or with spending requirements, such as being valid during specific times, he said.

“Such smart promotions reduce the margin pressure on merchants and allow them to use the deal in precise ways to attract incremental business, target only price-sensitive customers and reduce cannibalization,” he said.

In his most recent study, Dholakia examined performance of daily deals run through five major sites in 23 U.S. markets, which included a survey-based study of 324 businesses that conducted a daily deal promotion between August 2009 and March 2011. To read the complete study and previous papers by Dholakia on daily deal sites, visit www.ruf.rice.edu/~dholakia.

To schedule an interview with Dholakia, contact Amy Hodges, senior media relations representative, at amy.hodges@rice.edu or 713-348-6777.