Fast-growing Groupon is enjoying prominence in the social deal-making market, accounting for 79% of US Internet traffic to group coupon sites for the week ended November 27, 2010, while second-ranked LivingSocial received just 8%, according to Experian's Hitwise Intelligence.
Among a custom category of 81 group buying sites, Groupon received 5,928,683 total visits during the week ended November 27, accounting for 0.033% of US Internet traffic during the period, while LivingSocial received 633,828 total visits (0.0036%).
Though it appeared in the spring of 2010 that LivingSocial's visit growth might threaten Groupon's dominance, that growth-spurt was short-lived. Now, LivingSocial's market share is almost an order of magnitude lower than Groupon's.
Groupon Attracting Middle America
Both Groupon and LivingSocial are attracting "Urban Commuter Families," 9.04% and 9.74%, respectively. However, Groupon is attracting "Prime Middle America" (3.16%) at significantly higher levels than LivingSocial (0.96%).
Meanwhile, LivingSocial is attracting a higher percentage of "Young Cosmopolitans" than Groupon (6.32% vs. 3.06%), a segment that typically comprises early adopters, according to Hitwise.
Looking for great digital marketing data? MarketingProfs reviewed hundreds of research sources to create our most recent Digital Marketing Factbook (May 2010), a 296-page compilation of data and 254 charts, covering email marketing, social media, search engine marketing, e-commerce, and mobile marketing. Also check out The State of Social Media Marketing, a 240-page original research report from MarketingProfs.
Consumers Love Their Deals
Whether Groupon's success is as a result of recent economic times—or shifts in media that have enabled social deal-making, the time is right for bargains: 80% of surveyed consumers say they "feel exhilarated when they find a deal on something they want to buy," and nearly 60% pride themselves on finding the best deals, according to separate research from the Haas School of Business at the University of California at Berkeley.
Over 40% of consumers say they sometimes buy things if they're on sale, even if they don't need them.
Businesses Less Excited About Group Buying
However, social promotions such as those offered by deal-of-the-day site Groupon may be more popular with shoppers than businesses, according to a recent study by Rice University's Jesse H Jones Graduate School of Business.
Among 150 US businesses surveyed, Groupon promotions were profitable for 66% of businesses, but not profitable for 32%. Moreover, roughly 40% of businesses said they would not run such a promotion again.
Even so, investors are enamored with group-buying sites. Groupon recently turned down an estimated $6 billion dollar offer from Google to acquire the company, which would have made it the largest venture-backed deal since 1999 and the third-largest acquisition on record, according to Dow Jones VentureSource, the Wall Street Journal reported. Meanwhile, LivingSocial recently received a $175 million investment from Amazon, and another $8 million in funding from VC group Lightspeed Venture Partners.
About the data: The Jones Graduate School of Business findings were authored by Utpal Dholakia, professor of marketing at the Jones School, and are based on a survey of 150 businesses across 19 US cities and 13 product categories that ran and completed Groupon promotions from June 2009 to August 2010. The Haas School of Business survey (UC Berkeley) was conducted among 150 US adults in February 2010.
