"Deal of the day” platforms: what drives consumer loyalty?

Maintaining a loyal customer base is challenging for “Deal of the Day” (DoD) platforms. DoD providers market and sell deals on products and services, yet it is the merchants who ultimately deliver those to consumers. Low entry and switching costs drive competition in this market. However, research on the determinants of user loyalty in the DoD context is limited. This study uses Grounded Theory and Structural Equation Modeling to explore the phenomenon of DoD platform loyalty. Particularly, monetary benefits, signal-to-noise ratio, perceived risk, and service friendliness during a merchant encounter emerge as powerful determinants of loyalty in this novel context.