Photo: Yipit Blog
In August, each of the industry’s top five deals was from a different category – and all were from Groupon.The top-grossing deal last month was a travel deal from Groupon Getaways, a new category that Groupon entered less than six weeks before. The next four deals offered discounts on hamburgers, eye surgery, customised photo books and movie tickets.
Daily Deal Industry Expands into New Categories
This increasing category diversification is also evident by looking at overall industry data. As the chart below illustrates, Daily Deal sites have been rapidly increasing penetration into multiple category segments, such as travel and home goods.
Last fall, the top two categories, Spa & Beauty and Restaurants, contributed a combined 53% of industry revenue. A year later, the combined share of these two categories has fallen to 36% (despite the fact that revenue from these two categories increased by 549% over the same span).
Travel & Tourism is growing quickly due to the success of LivingSocial Escapes and the recent launch of Groupon Getaways. Groupon Getaways generated $9.6 million of revenue in August, putting it on pace to be a $100 million business annually. LivingSocial Escapes generated an additional $6.7 million in August.
Home & Auto has nearly quadrupled its share of North American Daily Deal industry revenue in the last year. Late last month, Groupon sold nearly 17k vouchers for a car wash in Indianapolis. Groupon also recently launched Groupon Products in several international markets, offering big-ticket home goods such as refrigerators, TVs and mattresses at steep discounts. While Groupon has yet to bring Groupon Products to North America, its early success makes it likely that Groupon and its competitors will try similar strategies here – further fueling growth in this category.
Perhaps surprisingly, health, medical and dental deals have had tremendous success as practitioners line up to offer everything from Lasik eye surgery to teeth whitening to chiropractic services. The high price points of these deals (often going for hundreds, if not thousands of dollars) help generate major revenue for deal sites.
The Nightlife and Entertainment segment has nearly doubled in market share due to the success of deals for bars, concerts, movies, plays and sporting events. Groupon’s partnership with LiveNation has already sold over 330k concert tickets since its launch just four months ago. Additionally, the launch of Poggled, a niche deal site focused on nightlife and entertainment, backed by Groupon’s co-founders highlights the expectations of further growth in this category.
Photo: Yipit Blog
The success of the Daily Deal model across multiple new categories indicates Daily Deal sites have found new ways to keep their customers excited while further broadening their merchant bases.
Follow @YipitData on Twitter for the latest industry trends and analysis by the Yipit Team.
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