Daily Deal or Group Buying promotions are able to generate a large number of sales for retailers in a short period of time. Deals are typically offered from 40-80% off regular price and last from 1-4 days. Due to the large savings involved, Daily Deal promotions can deliver a large amount of sales and consumers in a short period of time. Consumers are made aware of these deals by email alerts or directly through website promotion.
What retailers need to know:
- The objective for retailers in using a Daily Deal promotion is to drive sales and consumer adoption.
- No advertising cost. There is no cost for advertising through Daily deal providers. This is a significant advantage to small retailers with low advertising budgets.
- Deal providers however will receive a marketing commission on sales. Commissions range from 25% to 50% of the sales volume. The average for popular deal providers is about 45%. Low margin products and services can have a commission of as low as 20-25%
- Cash flow boost: Payments are processed by the daily deal company. The Deal company then pays the retailer minus the commission charged. This enables the retailer to get a boost in cash flow ahead of consumers redeeming the product or service in store.
- Not everyone will redeem their voucher: Whether it is due to laziness or forgetfulness, the fact is that 15% of consumers never redeem their deals voucher.
Coupon promotions are defined to be a special promo, rebate, price or value add offer provided to consumers. The offer can be anything and are typically distributed directly to consumers by the retailer or through a coupon distribution service such as an affiliate network or coupon portal. Benefits of offering coupons as a promotional vehicle include:
- Attracting keen shoppers into stores
- Inventory management
- Provides manufacturer-sponsored offers
There are 6 ways coupons are offered:
- Original coupons provided by, printed by and promoted by the Retailer
- Advertised coupons; where the retailer pays an advertiser to advertise or promote the coupon. The consumer brings the coupon ad into the store
- Printable coupons where consumers print the coupons themselves
- Online coupons where the consumer uses a link or code to redeem them coupon on the retailers shopping cart
- Mobile coupons where the consumer can search, find and redeem the coupon all on mobile or receives text based coupons.
- Manufacturer coupons that Retailers are promoting and distributing in any or all of the above 5 manners
Flash sales are a time-limited offer at a high discount, typically offered on products and promoted by an online retailer. Flash sales have proven to be beneficial for selling off surplus inventory for the manufacturer, the supplier and the retailer. Ultimately the consumer wins out.
Flash sales last anywhere from 1-5 days and may have a limited inventory. Consumers are made aware of these sales by an email alerts and through the Flash sales web site.
What is the difference between Flash sales and Daily deals for a retailer?
There is NO difference if you are a retailer promoting either on your own website. However, there is a difference for the Deal provider. A Daily Deal service does not carry inventory, it is not a store. They simply sell the deal and the consumer redeems the deal at the retailer. A Flash sales provider sells to the consumer and redeems and fulfills the entire order. For the consumer, the Flash Sales site IS the retailer.
Retailers can offer their own flash sales promotion directly on their website. Thus, catering to an increasing number of consumer who are looking for such offers. However, flash sales sites such as Beyond the rack, Gilte Group and other are considered etailers and competition for the traditional brick and mortar store.