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Daily deal sites Groupon, LivingSocial lose steam in August

Groupon wins
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According to CouponHQ, Both Groupon and LivingSocial lost a bit of revenue over the month of August. Laying blame at Hurricane Irene for the decrease in purchases and number of deals, Groupon fell by 4.8 percent and LivingSocial by 1.8 percent. However, revenue also declined for the companies in July. While Groupon’s average cost of a deal has risen over August, the number of Groupon vouchers sold is down by 14 percent. The average cost of a deal rose from about $40 in March to nearly $60 and the average price per voucher sold rose from about $20 to nearly $30. Groupon’s more expensive deals were travel related which also comprised 33 percent of the top grossing deals for the company in August.

According to the study, LivingSocial’s revenue has been bolstered by its partnership with Fandango in both March and June of this year. The promotion offered up two movie tickets for $9 for the same film and it ending up grossing about $9 million for the company. The amount of unique visitors to both companies fell in August again from a peak in June 2011. However, CouponHQ is waiting for the September figures to see if the trend continues in deals offered and purchased as well as overall traffic.

Groupon has also decided to slow down plans for an IPO based off a story in the Wall Street Journal today. The company cancelled plans for an investor roadshow that was supposed to kick off after Labor Day and is making the decision to wait for a more stable stock market before continuing plans to go public. Groupon has attracted criticism in releasing financial information due to a strange accounting inclusion that drew the attention of the Securities and Exchange Commission. Analysts are also concerned about the increasingly overwhelming marketing costs as well as the lack of a path to profitability due to increased competition.

Mike Flacy
By day, I'm the content and social media manager for High-Def Digest, Steve's Digicams and The CheckOut on Ben's Bargains…
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