Get Your Groupon
A few weeks ago a few friends and I went out to grab some Margaritas on a Friday evening. I was prepared to spend $20 to $30 on the Margaritas, Queso dip and my Enchiladas. Three or Four ritas later, and a full belly, we received our bill. $15. Excuse me? I had at least three ritas, and dinner. The week before, my friend had purchased a Groupon to said Mexican restaurant for $45, but only had cost her $18. She was nice enough to use this towards our entire bill. What a steal! We received a $27 discount with the pre-paid Groupon. How had I missed this fenomenon?
Thus, began my obsession with the Groupon. I went home that evening and signed up on Groupon.com to receive emails with the latest Groupon in my area. The signup was nothing more than entering my email address at the top of the page to received daily ‘deals’. The idea behind Groupon, is that a business determines how many coupons they would need to sell to make it worth their while and provide this number to Groupon. Let’s say they would need to sell 100 coupons to make this deal happen. An email is then sent out to everyone who has signed up on Groupon.com with the deal of the day in their city, and once 100 people have purchased the Groupon, the deal is on. 100 people have to purchase the Groupon that day to make the deal happen. If not enough people purchase the Groupon to make the deal, the deal is canceled and there is no charge to the people that purchased the Groupon.
Groupon.com started in November of 2008 out of the Chicago based site, ThePoint.com. The Point is a platform that focuses on collective action, which ties into the concept of building a Group of people to purchase at discounted rates. Groupon focuses on local businesses and features local charities. They pride themselves on offering “too good to be true” experience and deals. Groupons are now offered in more than 150 cities around the world and have just recently acquired Japan’s Qpod Inc. and Russia’s Darberry Inc. as part of its international expansion.
Although Groupon is working on a patenting their idea, many others sites have started to join the group discount bandwagon. Here are just a few of the sites competing;
8Coupons – This site lists the top 8 deals in a specific city.
Buywithme – Almost identical to Groupon, but with a smaller number of cities represented.
Woot – Does not require a ‘group’ to purchase, but just offers daily deals on one product.
Livingsocial – Offers 1 Day Deals for wide range of cities in the US
Steepandcheap – Focuses on outdoor gear with 1 Deal a Day format.
Last Thursday Groupon hit a milestone when they their first nationwide Groupon for the Gap, with a $25 price for a $50 Groupon. The Gap Groupons started selling at an average of 10 Groupons per second! As of right now, this is Groupon’s bestselling deal. The deal was so big, Groupon’s site crashed at the end of the day on Thursday. With the success of the Gap Groupon, I wouldn’t be surprised to see more nationwide deals popping up on Groupon. If you haven’t already signed up to receive a daily deal day, visit Groupon to start saving.
Where do you shop for 1 Day Deals?
I love this concept! I just signed up myself!
Groupon must really be a mixed blessing for a lot of businesses, given how little revenue most of them receive from Groupon and how much strain a Groupon can create in a short period of time.
From what I have heard, it isn’t a huge money maker for a lot of businesses. However, it is great exposure, and it will be interesting to see if some businesses start tracking repeat customers due to Groupon usage. It is a good way to get people through the door!
Basically, Groupon is ideal for businesses selling to a local market, citywide or at the neighborhood level, that can handle increased store traffic on an ad hoc basis as a result of retail promotions or traffic buidling campaigns (any excuse for a sale), and have a product that either lends itself to repeat purchase or has a high social customer experience component, or has high margin products that it can afford to deeply discount and can afford to sell muitiples of such items without running short and disappointing customers. e.g. restaurants, bars, club memberships, trunk sales, lingerie parties.
Possibly businesses with a very short seasonality could benefit to maximize their volume during the short sales season. e.g. fireworks, halloween costumes.
Most strictly service businesses probably won’t be as interested in Groupon unless they are brand new or absolutely dying on the vine. However, those service businesses that can service groups of customers at a time (especially ad hoc groups of individuals not known to each other) can leverage the social component to build customer groups of a profitable size and use the upfront promotional discount instead of a backend price drop to get the sale. e.g. dance studios, summer camps, Tupperware parties.
Now you can buy and sell past groupons and coupons from websites like Living Social, Groupon, Tippr, and Quirpo.
If you can’t use your Groupon or Coupon, sell it to someone that can!
http://local.quirpo.com/?page_id=2874