"Breakage" is a significant revenue generator in many businesses. Breakage refers to services, goods or value purchase by consumers, but never redeemed.Nearly 22 percent of deals purchased from Groupon, LivingSocial, BuyWithMe and elsewhere go unredeemed according to a survey from Rice University.
This represents a huge secondary market for re-selling deals, which is precisely what DealsGoRound does. DealsGoRound says such "breakage" represents a $577 million opportunity in the daily deals space.
The study from Rice found that 55.5 percent of businesses surveyed made money on their daily deals promotions, 17.9 percent broke even, and 26.6 percent of businesses lost money.
Keep in mind that 21.7% of their deals go unredeemed, which means the businesses pocket the money.
Almost 80 percent of customers who redeemed deals were new customers, but only 36 percent of them spent beyond the face value of the deal, and the study says that only 20 percent of customers returned to purchase something at full price.
$577 Million in Daily Deals Go Unredeemed
No comments:
Post a Comment