Consumer-side data on frequency, categories purchased and incrementality.

1. How Consumers Use Daily Deals: A Consumer Study by Forrester Research June 2011

2. Methodology Forrester partnered with an independent third-party to survey recent online shoppers about their attitudes toward and behavior with respect to daily deals sites (e.g. Groupon, Living Social); these sites are referred to interchangeably as daily deal sites and as coupon/gift card-based flash sale sites; this survey did not explicitly ask about daily deal offerings from Facebook or Google This survey was fielded from June 11-June 21, 2011 2,509 respondents of 9,449 consumers surveyed passed the initial screen of currently being “customers” (i.e. receiving emails from, visiting) daily deals sites; survey results on the following slides are derived from that respondent set Questions were drafted by team members from Forrester’s eBusinessteam Age-related demographic breaks were defined as follows: Gen Y (under 30); Gen X (ages 30-44); Boomers (ages 45-64); Seniors (65+)

3. Key findings Most online shoppers in the US currently do not subscribe to flash deal sites; 27% of survey respondents said they currently subscribe to emails from or visit these sites Consumers often subscribe to multiple sites, most frequently Groupon and Living Social About one-quarter of consumers of these sites/emails are “active” buyers, purchasing more than 4/year, while about 1/3 of these consumers have never purchased within the past year Restaurants are the most common offer redeemed (40% of shoppers say it was the last offer they purchased) with other offers divided among more than a dozen different categories While most online shoppers do believe that these coupons/offers can help to expose them to new businesses, 61% say that the last offer they purchased was from a merchant they had patronized before 22% of daily deal buyers say they spent more than the coupon amount when they redeemed their last offer; 18% said they had not yet redeemed the offer Consumer who unsubscribe from these sites or choose not to sign up cite “not wanting to receive more emails” as the primary reason; this poses a challenge for the continued growth of these daily deal sites

4. Overall daily deal site awareness and usage “Do you receive coupons from or visit coupon/gift card based flash sale sites?” “Please select the sites you receive emails from and/or visit.” Base: 2,193 daily deal customers “How many purchases have you made from those sites in the last year?” Base: 9,449 recent online shoppers Base: 2,266 daily deal customers Source: Forrester eBusinessDaily Deal Survey, Q2 2011

5. Consumer responses to flash sale sites vary by demographic Percent agreeing “Coupon/gift card based flash sale sites help me discover and try new retailers, products or services I may not have experienced otherwise.” “I usually check a flash sale site for a coupon or gift card before purchasing from a retailer or service provider.” “I sometimes do not redeem flash sale site coupons or gift cards I purchased before the expiration date.” Base: relevant daily deal consumers Source: Forrester eBusiness Daily Deal Survey, Q2 2011

6. Categories purchased also vary by demographic “In which of the following categories was your most recent purchase from a daily deal site?” Breakout of last purchase by demographic Base: 1,291 daily deal buyers Source: Forrester eBusiness Daily Deal Survey, Q2 2011 “Other” includes gifts, flowers, home, garden, consumer electronics, entertainment, medical/dental products and services

7. Most daily deal customers are not new to merchants and generally spend at the value of the offer Percent in agreement with statement regarding last coupon/gift card purchased “When I redeemed my most recent coupon/gift card, I spent…” Base: consumers who purchased daily deals Source: Forrester eBusiness Daily Deal Survey, Q2 2011

8. Why consumers unsubscribe or don’t subscribe “If you have unsubscribed or terminated your membership with any coupon/gift card based flash sale site, please tell us the primary reason why.” “Do you receive coupons from or visit coupon/gift card based flash sale sites?” Base: 2,574 respondents “Why haven’t you visited or signed up to receive emails from any coupon/gift card based flash sale site?” Base: 9,449 recent online shoppers Source: Forrester eBusiness Daily Deal Survey, Q2 2011 Base: 4,687 respondents

9. Thank you Sucharita Mulpuru smulpuru@forrester.com www.forrester.com