Affluent Consumers and Daily Deals
Do affluent consumers participate in daily deals programs? A recent survey by the American Affluence Research Center focused on the use of daily deals by luxury consumers and the extent to which this affluent market became involved in them.
Foodem, a company that connects wholesale buyers of food with food distributors, has reported that the number of daily deal websites now runs into the hundreds, many of these being large companies and others run by individuals.
The largest by far is Groupon, with 61% of the North American business, with Living Social Deals taking up 26%. A survey carried out by Foresee, the customer relations company, reveals that 91% of people who took up a deal had since either made further purchases from the same company or had plans to do so. Daily deals appear to be an effective means of promoting a company, although they may not be suitable for all brands.
Daily Deal Providers to Luxury Consumers
The popularity of the marketing system can be measured by the growth of the major players, who tend to be the original market leaders with this technique. The results of the AARC survey of the luxury market - the top 10% richest Americans - are interesting in this respect. A total of 47% of this group admits to using daily deals, and as expected, the largest provider by far is Groupon with 60% of customers.
However second amongst those affluent consumers who subscribe is Amazon Local Deals with 40%, while Living Social Deals takes only 34%. These figures include those that subscribe to more than one promotion. So although Amazon does not figure significantly among the general population, it does so among the affluent, each of whom subscribe to two programs on average.
Age is a significant factor among the wealthy, 66% of those under 50 subscribing, while women and the less affluent in this group also participate the most, with 54% and 52% respectively participating in at least one program. However, income itself was not found to be a relevant factor in participation.
Affluence Survey Metrics
According to the American Affluence Research Center, the minimum net worth of those targeted in the survey was $800,000 and the average age of those participating in the survey was 58.8. The set surveyed was 61%/39% men to women with an average annual household income of $266,900. This set of people represents around half of all consumer spending in the USA but cannot be regarded as representative of the USA as a whole. It is restricted to the top 10% affluent households in the USA.
Summary
The fact that 47% of affluent consumers participate in daily deals is indicative of their worth to this high-value market, and hence also to those offering the deals. The fact that 55% of the luxury market that participate in a deal are either new customers for a specific business, or have previously used that firm infrequently, indicates that daily deals appear to be useful in improving brand recognition and attracting first-time and repeat customers.
Affluence research of the luxury market is of considerable benefit to retailers and providers of luxury goods and services, of which daily deals is but one means of marketing new or surplus stock. It definitely helps to know what affluent consumers are thinking, and what their future purchasing intentions are.
About the Author
You will find further information on affluence surveys, and details on how the affluent spend their money on the AARC website at http://affluenceresearch.org/
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