During and after the recession, many consumers became more savvy and conscientious about bargain shopping and searching for deals. Innovative entrepreneurs like Groupon and LivingSocial, developed business plans to satisfy the consumer’s seemingly insatiable thirst for a deal. These websites deliver daily emails to consumers that are tailored based on consumers’ preferences, shopping habits, and locations. Millions of subscribers have signed up for varying deal sites and enjoy significant discounts and exposure to new products and services.
The initial success of the online deal website had many investors and businesses clamoring to participate; however, with consumers receiving an average of 10 deal related emails a day, many of these discount programs run the risk of oversaturation. Consumers are now beginning to experience a type of bargain burnout and the discounts don’t seem as appealing any more.
Marketers have often used buzzwords like “for a limited time” and “significant discount” to encourage immediate spending and build a sense of urgency. Yet, many consumers are no longer feeling this sense of urgency when so many competing deal sites are offering similar “significant discounts” on “limited time” merchandise. In addition, consumers have become somewhat inoculated to “bargains.” What consumers considered a bargain before the recession, no longer has the same appeal. Consumer expectations of what constitutes a good deal have changed rapidly over the past several years.
In order to combat this consumer complacency about bargains, researchers suggest that retailers become more random with their price promotions and lose some of the predictability. With so many retailers doing the same things and participating in the same daily deal sites, consumers are seeking retailers who will do something different.
- How do Groupon and other online discount websites work?
- Do you think Groupon and similar deal sites have long‐term staying power? Defend your answer.
Seth Fiegerman, “Deal Burnout: Too Many Discounts?,” The Street, August 8, 2011.