October 31, 2011

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On Groupon

Since the Groupon IPO is coming up, I thought I’d muse a bit on them. I have purchased 7 daily deals since the model started.  Here’s the details:

* 3 LivingSocial deals (Whole Foods, Amazon, and Upper Crust… all three places I already shop regularly and my purchases were not incremental to the stores).

* 2 Jetsetter deals (New hotels I had not been before, in places I travel to regularly. Is this a daily deal site or a flash sales site?).

* 2 Google Offers deals (One service provider, and one event, both of which I would not have done otherwise).

All of this data is sample size n=1, so it would be silly to draw conclusions about the behavior of a larger audience from it.  But, I feel safe with the following conclusions about my own usage.

Considering that the daily deal model has only been around for a couple years, I’d consider myself a fairly regular user, but not an addict.  Groupon was the innovator, but there’s little-to-no network effect in the deals business (there is an email list… but is it loyal?), so my business has been entirely with Groupon’s competitors to date. I treat daily deals opportunistically, but I don’t think they end up fostering much behavior change in me.

I don’t plan to buy in the Groupon IPO. As a consumer, I’m glad these daily deals exist. It sounds to me from the media that some merchants are happy with daily deals as a marketing solution too.  But, I don’t have conviction that Groupon specifically has some secret sauce that differentiates it from the rest of the companies in the market.

Comments (View) and 3 notes

3 notes

  1. douchebagbanker reblogged this from thegongshow and added:
    Groupon-like discount! thegongshow:
  2. thegongshow posted this

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