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Abstract
Daily deals are prepaid online coupons or vouchers that offered steep price discounts (anywhere from 20% to 70% off) at local businesses such as restaurants, nail salons, and sky-diving operators. Pioneers such as Groupon and LivingSocial have leveraged today’s social media and smart phones era to amass large consumer subscribers who opt in to receive these e-mail deals from local merchants. While U.S. consumer spending on daily deals could grow to over $5.5 billion by 2016, scholarly research on this social coupon is rather limited. To help narrow this literature gap, we investigated differences between daily deal subscribers-only (nonpurchasers), very satisfied purchasers, and all other daily deal purchasers in the context of their perceived value/attractiveness and skepticism of daily deals, discount size sought, and consumers’ value to merchants offering daily deals. Our online survey netted 329 participants who had purchased or received deals on hospitality products/services (e.g., fine-dining restaurants, hotel stays, vacation packages, or event admission tickets). We found that customers’ perceptions and attitudes were influenced by their satisfaction with daily deals purchased/redeemed. Managerial insights on converting more nonpurchasers to deal purchasers were also discussed.