Daily Deals. The good, the bad, and the ugly.

The first daily deal site I remember is woot.com. I loved the fun name and approach the company put on their sales process in the early days. Woot! Since then daily deal sites have taken-off with hundreds of players and variations. But now we read reports that daily deal site usage is declining.

I’ve never purchased anything from a daily deal, but I have some observations. I’ll call it the good, the bad, and the ugly.

Thumbs up for daily deals?

The Good

There is an opportunity for marketers to serve relevant deals based on the recent browsing history of the customer. You may see this already today on sites that use advertising cookies to determine the content of banner ads. Daily deal sites could advertise on properties like these and the rules engine would serve links to their content. The idea is create a more relevant experience by bringing interested buyers to the site.

Here’s a good example. Let’s say I purchase airline tickets for a summer vacation. If I see a daily deal ad for airport parking there is a good chance I’ll click through and explore the details of that deal.

Then again, maybe part of the magic of the daily deal is getting consumers who had no intention of buying a product to purchase it because the deal is just too good to let pass.

The Bad

Traditionally though, daily deals don’t really target to a specific audience. They work by offering a deal to the end customer that is determined by the buyers and business participants. The expiration or maximum number of coupons available works as a boundary but also serves to create urgency in the buying process of the customer. Personally, I hate pressure deals. It gives me visions of the automobile purchasing process and a used car salesman in front of a camera shouting “Sunday, Sunday, Sunday…..”

Another problem is the type of customers attracted presents problems to businesses that offer the deals. Does the practice really drive new customer growth? Or does it create a one-time customer that are only there for the deal and will not come back without another coupon? That doesn’t sound like building customer loyalty to me.

The Ugly

Maybe it’s the novelty of the idea has ended. Maybe the market is over saturated with daily deal sites and offers. We all know that once something is hot marketers jump in to pound advertising and offers. These are contributing factors to what is now called Daily Deal Fatigue.

So maybe true daily deal sites don’t survive without morphing to include more traditional attributes of retail sales. That sounds more like a sale of the day or sale of the week for a group of products. What’s special about that?

Woot!