Continuing Growth Forecast For US Consumer Spending on Online Deals

September 18, 2012

US consumer spending on online deals (e.g. daily deals, instant deals and flash sales) will reach $3.6 billion this year, up from last year’s $1.8 billion, according to a September 2012 report by BIA/Kelsey. Spending is expected to grow another 23% next year to reach $4.4 billion, although growth will then slow as the industry matures, with spending only increasing another 25% over the following 3 years. This translates into consumer spending on online deals climbing to $5.5 billion in 2016, and a compound annual growth rate (CAGR) of 19.8% from 2011 through 2016.

1 in 2 Small Businesses Likely to Participate

Some 11% of small businesses report being extremely likely to participate in a deal in the next 6 months, and 15% describe themselves as very likely. 24.3% are somewhat likely, meaning that overall, roughly half of the businesses surveyed online are at least somewhat likely to participate in a deal in the next 6 months.

The remainder either are not very likely (23.7%) or not at all likely (26%) to participate.

Deals An Anchor For Non-Ad Services

The BIA/Kelsey report expects online deals to become “an anchor for a platform of non-advertising small-business services,” which include instant mobile deals; loyalty products; promotions; transaction processing and e-commerce, among other services.

A July 2012 Rice University survey revealed that businesses that are experienced with daily deal promotions attract nearly 80% of their new customers using daily deals, and see equally stable conversion rates for repeat purchasing and spending beyond deal value.

About The Data: Since 1999, BIA/Kelsey surveyed approximately 300 US small businesses through its Local Commerce Monitor (LCM) surveys, which track small- and medium-business ad and marketing spending, Web footprint, media performance assessments, and opinions about key topics like emerging media and sales channels.

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