Are Daily Deals Dying? Or as Hot as Ever?

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After rocketing to popularity with consumers, the buzz around daily deals was bound to fade. In the past year, news has broken that one-third of daily deal sites have disappeared, and signs have surfaced that many merchants are less likely to run daily deals in the future. Amid these daily deal downers, however, a new study has been released indicating that deals from Groupon, LivingSocial, and other sites are faring just fine, thank you very much.

The research firm ForeSee’s new study offers survey data that makes the case that American consumers are still interested, and still spending money on daily deal sites. Not only that, consumers who buy daily deals are very likely to go back to the business that offered the deal, and it’s this repeat business that makes the daily deal concept still quite an attractive proposal for businesses now and down the line.

First off, though, there’s no getting around the fact that daily deal business is not quite the rock star it was circa 2010. Foresee’s research, conducted in November and December 2011, shows that 60% of visitors of the top 40 websites were enrolled in at least one daily deal site. That’s a decrease from the previous spring, when the figure was 65%. Similarly, Foresee found out that percentage of subscribers who had purchased a daily deal over the last 90 days was shrinking, from 67% in the spring of 2011, to 63% in the early winter of 2011.

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Nonetheless, the report argues that the daily deal business remains strong, especially because of the likelihood that daily deal purchasers will return and spend money with the businesses featured in deals. This, after all, is why businesses offer their products and services at the severely discounted prices available via daily deals.

When daily deal subscribers were asked to consider their most recent deal purchase, 91% said that they have either already done business with the company after they’d redeemed their deal voucher, or they plan to do so. This question was not posed in ForeSee’s spring survey, so it’s impossible to tell whether this sentiment is rising or decreasing among consumers. But 91% seems like a pretty impressive figure.

ForeSee also likes to bring attention to the fact that when subscribers were asked to think about their most recent deal purchase, 12% had never heard of the company previous to seeing the deal in their e-mail inbox. Businesses love reaching new customers, and they especially love reaching new customers who are likely to become repeat customers.

(MORE: 9 Reasons Why You Shouldn’t Trust Online Reviews)

On the other hand, 40% of those surveyed said they were already frequent customers of the company, and another 26% classified themselves as “infrequent” customers (but customers nonetheless) of the business featured in the most recent deal they’d purchased. This could mean that the company is essentially offering a discount to a customer who might have otherwise willingly paid full price. That’s probably a tradeoff many companies can live with, so long as these customers return early and often, and at least pay full price some of the time.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

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