Rise Of Social Deal Coupon Sites


With a sluggish economy, many consumers are on the hunt for cheap deals and huge discounts. It’s no surprise then, that a company offering 50 percent discounts on a range of services and products could flourish. With the incredible success of Groupon, which Forbes predicted would be the fastest company ever to reach $1 billion in sales, it’s no wonder there is a plethora of social deal sites.

Consumers have put more value on price than brand, and now there are hundreds of sites offering huge deals, because it’s a way for businesses to get new customers in the door who may have otherwise hesitated due to cost.

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How They Work

Sites like Groupon negotiate with businesses in your city to work out a discounted deal for customers. Usually it is something like, pay $10 for $20 worth of goods and services. The deal only becomes active when a minimum number of people buy it. Each day Groupon features a new deal for an activity or product that is available for a limited time. Deals offered can cover a variety of events and goods, from spas and restaurants to concerts and vacations.

Groupon and LivingSocial are often referred to as social deal sites because of the ease in sharing the deal. When someone buys the discount they can simply share it with friends and acquaintances via Facebook, Twitter or email, and even receive the deal for free if they manage to refer enough people who also buy it.

These sites are successful by bringing together a large number of people to get a discount by buying bulk. Groupon calls it “collective buying power.” The whole idea appears like such a good agreement for everybody involved. The seller gets hundreds of new customers and exposure, while the buyer gets an amazing discount and the ability to try something new.

Deal Sites

  • Groupon is the current king of social deal sites. Started in 2008, they have launched a thousand copycats due to their amazing range of deals and witty write-ups.
  • If Groupon is the king of deal sites, then LivingSocial is the queen and major competitor to Groupon.
  • Google decided to join the fun with GoogleOffers, after its offer to buy Groupon was turned down in 2011.
  • AmazonLocal is Amazon’s version, available in most major cities.
  • There are several other smaller versions such as Yipit, Woot and Tippr.

Falling Popularity

With the meteoric rise in popularity of social deal sites, it only seems natural that some of the glitter and attraction would eventually wear off.The Wall Street Journal reported that roughly one-third of deal sites have disappeared over the last year. Business owners are growing reluctant to offer deals, due to negative consequences like being overwhelmed by buyers. The original intent of offering a deal was to increase exposure, and hope the new customers would continue to come back. Many businesses treated it like advertising, and not a huge profit increase.

Unfortunately, many business owners struggled to meet the demand of mobs arriving with Groupon coupons in hand. Many have gone out of business after losing money on the offering, and others see it as too risky if the jump in customer volume isn’t sustained.

Even though the popularity of deal sites has slightly decreased, there are still so many around you won't have any trouble saving money.

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Date of original publication:
Updated on: November 10, 2015

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