According to an update of U.S. deals forecast by BIA/Kelsey, U.S. consumer spending on deals (including daily deals, instant deals and flash sales) will grow from $873 million in 2010 to $4.2 billion in 2015, representing a 36.7% compound annual growth rate. In March the firm had estimated 2015 deals spending at $3.9 billion.
Mark Fratrik, BIA/Kelsey vice president and chief economist, “… as more… awareness grows and new markets are entered… we see a ceiling on how many deals consumers will buy… (but) we believe daily deals reinforce other advertising and related services, like instant deals and flash sales… “
Among the factors underlying this revised forecast, from the report, are:
- A bigger increase in the number of registrants for deals services. Market leaders Groupon and LivingSocial have expanded quickly and many more participants have entered this arena, including vertical sites and local media companies
- Growth in the number of registered users who are “active” in buying coupons
- Greater specialization of deals sites (both vertically and by neighborhood) will lead to more activity by registered users
- Increase in the average number of transactions, resulting from more efficient providers of these services and expansion of the types of products and services being offered
- Rise in the average price per transaction, owing to general inflation and the attempt by some providers to offer more valued services at higher margins
By the way, the report also estimated that Groupon and LivingSocial will continue to lead a growing marketplace of 600-plus players. Read more from source link below!