Groupon is in trouble | Hacker News Reader

Groupon is in trouble

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18 pointsjaya7 comments

Here is the original article so you don't have to visit the site that scraped it. http://hosted.ap.org/dynamic/stories/U/US_GROUPON_IPO?SITE=L...

"Most of the deals are for female-centric services like spas and nails ... I typically delete it each day now without opening the email."

So true. I ended up unsubscribing from the multiple daily emails from Groupon. I did actually buy one, but the offer was forwarded to me by a friend.

The study mentioned in the article that I submitted a while back:

http://arxiv.org/abs/1109.1530

The problem that Groupon has to overcome is making a sustainable business out of an unsustainable marketing model. In reality, daily deals aren't allowing brands to develop deeper, more engaging business to customer relationships.

However, with the proliferation of viral media and marketing and an increasingly social internet, they may find a niche of companies that truly benefit from the products Groupon offers.

In reality, daily deals aren't allowing brands to develop deeper, more engaging business to customer relationships. Couldn't agree more. Businesses need to pursue metrics around customer-lifetime-value with a vengeance. Once they do, they'll realize non-incentivized campaigns convert better.

The Groupon trend reminds me about this anecdote from 'Switch' (by the Heath brothers), about how given a larger bucket of stale popcorn, the audience always ate more. I know of folks who now find it painful to buy something (services, food etc.) at full price. The implications are immense -- there's been a permanent & massive shift in consumer behavior. Also, there's tons of folks starting small businesses increasingly, to keep re-fueling the groupon's of the world.

Over time, I'm pretty certain this'll be the result: http://www.pcadvisor.co.uk/news/internet/3311077/groupon-liv...

Counterpoint: http://www.businessinsider.com/groupon-analysis-2011-10?op=1

A note on this from a wildly successful hedge fund manager friend of mine -

"In my mind, there is very little fundamentally concerning here - sure, growth is slowing and conversion stats slowing but all the negative hype looks massively overblown by startup techies who don't understand retail/couponing/restaurant businesses. Based on metrics, Groupon is still a phenomenal business that is growing rapidly"

"a wildly successful hedge fund manager friend of mine"

A very important and extremely wise sage for our times, no doubt...

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