Coupons of the 21st Century: The Golden Age of The Daily Deal Industry

By Kathleen Donnelly
Elon Journal of Undergraduate Research in Communications
2012, Vol. 3 No. 2 | pg. 3/3 |

V. Conclusion

Coupon purchasing is at an all-time high. The 2012 Coupon Fact Report, issued by NCH Marketing Services, reported $470 billion of coupon value was offered by marketers to consumers in 2011 (NCH, 2012). Shoppers responded to the report by redeeming $4.6 billion in savings, an increase of 12.2% over the year prior, and 58.6% higher than five years ago (NCH, 2012). Coupons have adapted to the 21st century shopper by appealing to the masses on the Internet. Online coupon sites, such as Groupon and LivingSocial, are the new couponing system offering daily deals to subscribers through email, Facebook and Twitter.

The case study analysis indicates the heaviest daily deal users are the most enthusiastic about receiving daily deal alerts and notifications. Despite worries from the online coupon industry, users did not indicate a fatigue of daily deals. On the contrary, the market is continuing to grow and businesses continue to be interested in working with daily deal websites to increase their revenues. The majority of users of both Groupon and LivingSocial are interested in purchasing a deal in the near future.

In terms of demographic information, most subscribers of Groupon and LivingSocial were women and lived in urban cities. The case study indicated LivingSocial subscribers as more successful and younger than the typical Groupon user. Additionally, LivingSocial users tend to live in the Eastern regions of the United States, while Groupon users live in the Midwest and Pacific regions of the country.

When comparing the two companies, Groupon has the higher percentage of awareness among consumers. They also have the higher number of subscribers, although the number of LivingSocial subscribers is growing at a faster rate. Users indicated Groupon as their favorite daily deal website, followed by Restaurant. com and LivingSocial in third. Although research found Groupon as the most popular daily deal company, the market for both sites continues to expand. According to Patal (2011), Even though Groupon has undoubtedly fallen from the grace of the press in recent months after drawing back its financial curtain for an initial public hearing, the fact remains: U.S. consumers are still gaga for deals and Groupon is their favorite site by far, with few reporting any shade of deal fatigue. (p. 79)

Both Groupon and LivingSocial relate to subscribers through emotion-provoking language and word choice in each daily deal description. Both companies rely on the message embedded in the email, tweet, or Facebook post to effectively persuade subscribers to purchase the promotion.

Groupon, in particular, uses creative, humorous and witty content to relate to subscribers on a friendly and lighter level. Each company scripts artistic content through poetic and humorous word choice to entice subscribers to purchase deals. This advertising technique directly relates to Aristotle's early research on appeal to the audience in terms of the three forms of artistic and inartistic proofs: ethos, pathos and logos. These aspects of communication appear in almost all forms of Groupon's and LivingSocial's advertising content to relate to an individual receiver.

The case study analysis found that Groupon and LivingSocial rely on social media sites to increase their subscriber base, intensify brand awareness, advertise daily deal promotions and communicate with consumers at a friendly and comfortable level. Although the heaviest of daily deal users indicated email as their main means of communication with the two companies, respondents remained enthusiastic about sharing promotions with friends and followers through social networking sites. Interestingly, LivingSocial has more Facebook fans and Twitter followers; however, Groupon offers subscribers the chance to follow Facebook and Twitter sites for all cities involved in the promotions. LivingSocial, on the other hand, focuses more on the company's general and international Twitter and Facebook accounts. Both companies tend to rely more on Twitter rather than Facebook to interact with customers.

Groupon, LivingSocial and other companies in the daily deal industry have potential for growth and expansion. If daily deal websites continue to relate to its audience on a national and local level, communicate with subscribers through humorous and witty messages, rely on social media sites to provide open and honest feedback with users, they will continue to see success in the coming future. The business model used by both companies will be sustainable as long as they continue to offer value to both subscribers and businesses involved in the daily promotions. According to Arabshahi (2010), "Almost 88.2 million people, half of all U.S. adult Internet users, will redeem an online coupon in 2011, and this number should increase to 96.8 million by 2013" (p. 6). At the end of the day, consumers are always going to search for the best deal, thus, fueling the long-term growth and sustainability of the daily deal industry.


Acknowledgments

The author would like to extend a thank you to Dr. Victor Costello at Elon University for all of his guidance, inspiration and support throughout the process of researching and writing this article. The author is also thankful to Doctor Byung Lee, associate professor of Elon University's School of Communications, for his supervision and help of revision for this article. This research would not have been possible without their support and dedication.


References

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Byers, J. W., M. Mitzenmarcher & Zervas, G. (2012). Daily deals: Prediction, social, diffusion, and reputational ramifications. WSDM '12: Proceedings of the Fifth ACM International Conference on Web Search and Data Mining. New York: ACM.

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Dholakia, U. M. & Kimes, S. E. (2011). Daily deal fatigue or unabated enthusiasm? A study of consumer perceptions of daily deal promotions. Social Science Research Network. Retrieved from http://ssrn.com/ abstract=1925865

Flinn, R. (2011). LivingSocial buyers richer, smarter than Groupon's, study says. Bloomsbery Businessweek. Retrieved from http://www.businessweek.com/news/2011-0427/livingsocial-buyers-richer-smarterthan-groupon-s-study-says.html.

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LivingSocial. (2012). Discover the best deals in your city. Retrieved from http://livingsocial.com/deals/how_it_ works.

MacMillan, D. (2011). LivingSocial aims to be different from Groupon. Bloomsberg Businessweek. Retrieved from http://www.businessweek.com/magazine/livingsocialaims-to-bedifferent-from-groupon-09222011. html

NHC Resource Center. (2012). The 2012 NHC coupon facts report. Retrieved from https://www.nchmarketing. com/ResourceCenter/

Patel, Kunur. "Think Consumers Are Tired of Deals? Better Think Again." Advertising Age, 82(33), 78-79.

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Qualman, Erik. (2011). Socialnomics: How social media transforms the way we live and do business. Business Book Summaries. Ipswich, MA: EBSCO Publishing Inc. Retrieved from http://www.ebscohost. com/uploads/corpLearn/pdf/bbs_socialnomics.pdf.

Steiner, C. (2010). Meet the fastest growing company ever. Forbes. August 30, 2010. Retrieved from http://www.forbes.com/forbes/2010/0830/entrepreneurs-groupon-facebook-twitternext-web-phenom_3.html.

Streitfeld, D. (2011). Funny or die: Groupon's fate hinges on words. The New York Times. Retrieved from http://www.nytimes.com/2011/05/29/business/29groupon.html?_r=1&pagewanted=all.

Ye, M., Wang, C. Aperjis C., Huberman, B. A. & Sandholm, T. (2011). "Collective attention and the dynamics of group deals." Cornell University Library. Retrieved from http://arxiv.org/abs/1107.4588. Yin, R. K. (1984). Case study research: Design and methods. Newbury Park, CA: Sage.

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