Will it ever. Consumer spending on deal-a-day offers, estimated at $873 million in 2010, is forecast to reach $3.9 billion in the U.S. by 2015, says local media advisory firm BIA/Kelsey. That's a compound annual growth rate (CAGR) of a whopping 35 percent.
That's not the high estimate, either. BIA/Kelsey's best case scenario calls for a $6.1 billion market by 2015, a 47 percent CAGR. Even their worst case projection, $2.1 billion, has a 20 percent CAGR.
“Deal a day has experienced incredible growth during its three-year incubation period beginning in 2008,” says BIA/Kelsey's Mark Fratrik. “We expect this to continue as companies in the space are rapidly adding markets and increasing total user count. They are also subdividing existing metros to provide deals closer to where users live, which will help offset any drop-off that may occur due to consumer fatigue as the novelty of the form fades.”
Consumer fatigue? How about consumer outrage? Groupon is still reeling from a deal it offered with online florist FTD in February. The 3,300 people who signed up expected to get $40 worth of flowers for $20. They were directed to a Groupon-specific microsite where prices were higher than those on the regular FTD website. Groupon and FTD apologized, but who's going to sign up for the next FTD deal now?
But that's just Groupon. BIA/Kelsey says more than 200 companies now do business in this space, reaching 102 million consumers in 178 U.S. cities.
“Deal a day doesn't exist in a vacuum. It will become a part of the growing deals and offers landscape,” says BIA/Kelsey's Peter Krasilovsky.
For restaurants, social media platforms like Foursquare and Google Places may become the preferred option. Instead of using email like Groupon, these services let operators send deal offers to the smart phones of people near their location. You retain command over the parameters of the deal, and there's no cost or revenue splitting involved.