Last month, a study conducted by Boston University researchers John Byers and Georgia Zervas and Harvard University researcher Michael Mitzenmacher found that while Groupon and LivingSocial deals can increase the number Yelp reviews, they can also reduce Yelp scores by ten percent. yelp reviews that mentioned the words “Groupon” or “coupon” lowered star rating by ten percent. Reviews that mentioned both words showed a 20 percent drop.
Daily Deals sites are attracting millions of customers. It’s a lively marketplace with hundreds of companies competing for a limited number of users and businesses willing to give them a try.
How lively? It’s hot. According to researchers at Lab42, there are more than 660 deals sites online today. But is this sustainable? Certainly not all those sites will survive. Some of us here at Mashable are questioning whether the Daily Deals era is coming to a close.
The drumbeat heralding the demise, or at least leveling off, of the daily deal market has been picking up in recent days. Most recently, news broke that Groupon was delaying its IPO.
Other worrisome recent events for the industry: Facebook has pulled its Daily Deal offering; Yelp is scaling back its sales force for these products. Experian Hitwise reported a significant drop-off in Groupon traffic this summer; according to PriceGrabber’s Local Deals Survey, 52% of respondents expressed feeling overwhelmed by the number of daily deal emails they receive.