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ILM West: Rumors of Deals’ Death Are Greatly Exaggerated

By: 13 December 2011

Dan Hess, CEO of deals aggregator and research company Local Offer Network, played mythbuster at ILM West, using data to set the record straight on where the market is moving…and where it isn’t.

Hess is convinced that there is still ample room for “specialization” across geography, demography and interests…rather than the doomsday consolidation/roll-up  scenarios forecast by many. As a result, “the money is still there,” meaning that margin compression hasn’t undercut the business models of many deals providers as expected.

This reinforces BIA/Kelsey forecasts, which project the U.S. deals market to reach $4.2 billion by 2015.

Rather than the initial conception of the buyer as a pure deal hunter, LON’s data suggest that shoppers are moving up-market in their purchase behavior, using deals for “higher-consideration items” such as clothing and accessories, health/medical/dental, and travel/hospitality. The average deal voucher has jumped to $76.33. Shoppers also have far more time to consider these pricier purchases, as average deal duration is nearly five days (up from 1.7 in Q3 2010).

Hess’ lasting words: “If all else fails, get a laser.” Data shows that laser hair removal deals are big winners.


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