Boston, May 23, 2012 – A new report from Aite Group reveals which consumer loyalty programs enjoy the highest level of merchant participation and are seen as the most effective at lifting sales and protecting margins. Based on an April 2012 Aite Group survey of 40 merchants, the report shows a lack of merchant confidence in daily deal programs compared with marketing initiatives such as in-store promotions and gift cards. It also discusses merchants’ favored programs and marketing methods.
As the number of marketing initiatives and choices expands, merchants and their business partners seek the most effective programs. Survey participants claim that in-store promotions and gift cards have the highest customer-participation rates and are the most effective means of lifting sales and preserving margins. Skepticism runs high regarding the value of daily deal programs, however. These programs, recent additions to more traditional marketing initiatives, see lower retailer participation than do time-tested marketing initiatives, and industry executives are less than confident about the effectiveness and scalability of daily deals. Less than 20% of respondents say daily deal programs are effective at protecting margins.
“As consumer interest in daily deal programs increases, daily deal providers will need to consider the sustainability of their business models,” says Madeline K. Aufseeser, senior analyst with Aite Group and co-author of this report. “In spite of strong consumer acceptance, daily deal business will be short-lived without greater merchant acceptance, and merchants currently prefer marketing programs that scale and protect margins.”
This 24-page Impact Note contains 18 figures and two tables. Clients of Aite Group’s Retail Banking service can download the report.