Daily deals sites gain in popularity

New research has revealed that daily deals sites such as Groupon and Living Social,

which offer great deals on shopping, eating, and leisure attractions are gaining in popularity with online shoppers in the UK, with 65 per cent of online shoppers engaging with Daily Deals sites either by visiting the site directly or reading an email newsletter.

According to the data from Kantar Media Compete’s latest Online Shopper Intelligence study, 68 per cent of shoppers now agree with the statement, "I always look out for special offers", and nearly half, 48 per cent said "they always use money off coupons and vouchers".

With more media coverage than any other group buying site, but a lower ad spend, Groupon was shown to be the most popular site with 80 per cent market share and 8.1 million monthly visitors.  Kantar Media Audiences InfoSys+ data showed that advertising in the space kicked-off in June 2011, with ads seen over 15 million times. The biggest spender was KGB Deals with its ad being seen over 7 million times by individuals, followed by Wowcher (364,618), Living Social (312,140), Groupon (102,647) and Wahanda.com (35,618).

However, the survey found that only 37 per cent of consumers who bought from these sites made a second purchase from the same supplier. John Thekanady, UK client services director at Kantar Media Compete explained: "It’s clear that group buying sites build awareness and encourage impulse purchase behaviour efficiently, but featured companies are failing to convert those shoppers into loyal customers - bringing into question the long term viability of these sites.

"With an expanding competitive set and talk of daily deals fatigue, group buying sites would be well advised to target their offerings to specific consumer segments to distinguish themselves and help advertisers reach a more engaged audience."