In the past, someone who was trying to find great deals would have to spend hours searching, combing through newspapers, looking for ads and coupons or visiting stores to find sales and special rates. People signed up for mailing lists to receive special offers and, sometimes, exclusive deals on merchandise. Then the Internet came around and revolutionized the way people shopped, even down to the coupons they used. Sites began cropping up that were dedicated to offering digital coupons and collecting information on all of the latest sales offered at major retailers. Then Groupon came and turned the world of couponing on its head. Offering discounts of around %50 on pre-determined items only after a certain threshold of consumers have agreed to participate helps the company ensure a minimum number of customers for the businesses it works with while enticing customers to try new stores by giving them a steep discount. Groupon has revolutionized the daily deals category it helped create by unleashing its latest offering: Groupon Now. Several companies have started emulating Groupon’s business model, coordinating with local businesses to offer special deals for a guaranteed minimum number of customers, so the company has had to step up its game. The service is now rolling out multiple deals for each city, matching them up with customers based on location data from their iPhone or Android smartphone. Customers can choose from “I’m Bored” or “I’m Hungry” options and the service will spit out the closest offerings to them, allowing them to choose from multiple, conveniently-located discounts. The service isn’t available for all cities serviced by Groupon yet, but the company is adding new locations as quickly as possible. In order to stay out in front of other daily deals sites, the company will have to continue innovating, expanding their reach and providing more services that will, hopefully, garner increased customer loyalty. What does all of this mean for consumers, businesses and Groupon’s competitors? As Groupon begins to expand its deals offerings, customers will be given more options daily, which could change the way they shop entirely. Rather than planning well ahead of time, searching for the best deals on restaurants or fun activities, people will be able to use Groupon Now to find the best deals available close by, leading to more spontaneous purchases and more diversity in their spending habits. The number of businesses that partner with Groupon will certainly need to be expanded for the service to offer multiple deals in several areas daily, giving more businesses the opportunity to partner with Groupon and find new customers. Groupon’s competitors will have to start innovating in new ways, too. Soon the thought of only having one or two deals per day for a given city will seem antiquated and consumers will begin expecting more deals and more features. As it stands right now, Groupon is on top of the daily deal category and is giving other deal sites some stiff competition.
Thomas Gibbs is a freelance writer and a frequent contributor at Big Fish Small Bowl.
Deal of the day websites like groupon or aggregators like http://www.dddeals.co.uk offers a real deal for the bargain hunters. I love to use them.
Twitter: AprilHester
says:
Groupon is great! All of the Groupons I have purchased (as well as other Daily Deal sites) have been great finds for me. As long as you use them responsibly, they can be a great tool for saving money. These new features will be a great addition to an already wonderful thing.
April@CentralKentuckyDealSpot´s last blog post ..Kentucky Wildcat football tickets- save $$ on tickets!
Twitter: drkadasp
says:
Sorry, the name tag was wrong. I’m not from Groupon, of course. : )
Twitter: drkadasp
says:
Great post, although I see Groupon’s future much darker. The problems are the following:
1. Merchant retailers are still closed out of this model because goods almost always have less profit margin than 50%, which is the minimum discount at Groupon, not speaking of the dily deal site’s fee.
2. Daily deal sites (not just Groupon) brings people to the stores but unable to keep them in. There are several stories about this issue on the net. So short term maybe the revenue can boost up, but profit margin drops down – and in long term, the profit is the key to stay alive, grow or expand.
3. Groupon will prosper until someone doesn’t find the way to use the reserve in brand advocacy and brand engagement. This is the next large reserve that business organizations can use to get competitive advantage over their competitors.
Sorry if I went too far from the topic. The article itself was very valuable for me. I just think this bubble will burst soon. Maybe along with the IPO which is not far away for Groupon.
Decent post, I gotta vouch for Groupon, they’ve saved me so much money and they even have deals for local business’s across the street from me! Thats what makes groupon so good for me, they don’t just have deals with the top retailers but small business too!
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