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Deal of the day is a form of e-commerce in which an intermediary allows merchants access to a subscriber list, to promote their offerings at a discount. This study performs a cluster analysis on the purchase history of a deal intermediary, to identify customer segments based on their purchase frequency, price sensitivity and the types of deal they buy. Five segments were identified, including a large group of customers who made one purchase and then stopped buying, a small group of extremely deal-prone subscribers, and a segment that limits their purchases to very few types of product (e.g. restaurant meals or spa treatments). The findings further show that targeting deals to specific customers may be desirable in the future to prevent information overload and ensure loyalty.
