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Are Groupon’s Deal Addicts Killing Black Friday?

Groupon Deal Addicts

I wanted to make sure you had Retrevo’s latest study about Groupon shoppers, Deal site users, “Deal Addicts,” and how this trending subculture can impact retailers this holiday shopping season.

The Groupons and the Woots of the world have been feeding Black Friday-caliber deals to consumers throughout the year. Have they created a subculture of deal “addicts” who scoff at discounts less than 50% off? Will retailers need to go even deeper to make Black Friday (Nov 25, 2011) deals attract these hard core deal shoppers?

While not all consumers are obsessed with finding the absolute lowest price, this latest study discovered a class of shoppers who buy lots of things through deal sites and they expect deep discounts on what they buy.

Profile of a Deal Addict

Take a look at that collection of shoppers seated in their folding chairs in the cold and rain outside the local Kmart in the predawn hours of Black Friday. Now think about the fact that many of those hard core Black Friday deal hunters are also members of a deal sites like Groupon. In fact, almost three quarters of last year’s Black Friday shoppers (70%) say they are members of deal sites. At the same time, almost the same percentage (70%) of members of deal sites shopped on Black Friday.

We look at that intersecting group as an emerging consumer subculture who are addicted to deals and only buy things if they are deeply discounted.

Women are more likely to buy things at discounted prices.

Retrevo Asked: Do you typically buy things that are discounted, either in stres or online?

  • 23% of women said almost everything they buy is discounted, versus only 13% of men
  • 35% of women said most things they buy are discounted, versus only 27% of men.

Women Vs. Men Discount Shopping

What This Means for Retailers

Deal addicts don’t have to wait for Black Friday any longer, they can get a deal “fix” whenever they want from companies like Groupon and other deal sites of the world. These deal providers, for better or for worse, have cultivated a group of consumers with a very high tolerance for deals who expect substantial discounts not only on Black Friday but all the months of the year.

Shoes, laptops and HDTVs are the most popular among Black Friday “Deal Site Users”

Retrevo Asked Deal Site Users: On which of these items will you be looking for a deal this Black Friday?

  • 41% said they’ll be looking for deals on shoes
  • 24% said they’ll be looking for deals on a laptop
  • 20% said they’ll be looking for deals on an HDTV
  • 19% said they’ll be looking for deals on a tablet computer (non-iPad)
  • 17% said they’ll be looking for deals on jewelry

What Deal Site Users Shop For on Black Friday

How Low do Retailers Have to Go?

When we asked deal site members what they considered to be a good deal on various types of products and services we were surprised to see very high expectations. Among deal site members, more than the respondents needed items to be at least “50% off” to be considered a good deal, and this was true across categories. In fact, one in four respondents wanted a 70% off on apparel and shoes.

Most “Deal Site Users” think that a “good deal” means at least 50% off

Retrevo Asked Deal Site Users: What would you consider to be a good deal on the following types of things?

  • Apparel & Shoes: 69% of people thought 50% was a “good deal” – 24% said 70% off was a “good deal”
  • Home Goods: 63% thought 50% off was a “good deal” – 20% said 70% off was a “good deal”
  • Restaurant & Spas: 61% thought 50% off was a “good deal” – 17% said 70% off was a good deal
  • Electronics: 52% thought 50% off was a “good deal” – 16% said 70% off was a good deal

Deal Shoppers Value Discount

Groupon has been in the news lately not only for its upcoming IPO but also because they are expanding into special offers on products with Groupon Goods. This study found Black Friday product wish lists loaded with a range of products with clothes and shoes topping the list, Groupon could be very successful offering discounts on them.

Retailers Face New Challenge This Black Friday

Although many consumers are quite happy paying full price for everything from electronics to apparel, there appears to be an emerging class of shoppers who mostly buy things on discount and this group has little trouble finding them all year around from deal sites like Groupon. This group of deal “addicts” comprises a large percentage of Black Friday shoppers. Retailers may have to discount more than ever to satisfy them.

Guest Author: Andrew Eisner, Director of Community & Content. Retrevo, one of TIME Magazine’s “Best Sites of 2011,” is a consumer electronics shopping site that helps people discover and purchase gadgets that meet their needs.

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