The BBC asks if daily deal sites have had their day? | Hacker News Reader

The BBC asks if daily deal sites have had their day?

bbc.co.uk

32 pointscraigmc22 comments

What I would like is the anti-Groupon.

Right now, every time I see a place that I currently frequent show up on Groupon I cringe. It means that my favorite restaurant or coffeeshop is going to be mobbed by cheapskates looking to save a few bucks. It means that the staff is going to be harried and tired. It means that I won't be able to get a reservation for a few months.

I want a way for these places to say "Hey -- regulars! We love you! Come back and spend time here so that we can avoid daily deals. We'll be happier and so will you!"

If you're a regular, aren't loyalty cards - you know, hole-punch-tracked rewards, etc. - enough? How much web connectivity do you need from a place that you actually frequent?

Some (MMOT) classmates are trying to do that (loyalty cards for small shops plus online advertising).

The main block is actually apathy from the storeowners - they don't believe they need it, most of them are conformists and traditionalists, not enterprising or risk-takers.

Creating that web of connections online and offline is highly valuable to a company. The more loyalty you have the better. The online world should help reinforce offline relationships. The internet is, after all, a tool.

I think deal sites absolutely cater to "bottom feeders" who may be just looking for deals. I think it is the wrong way to attract a loyal following. A major point of this article made was with the 99£ oven cleaning for 19£. Who would pay 19 and then repeat and pay 99?! That's nuts, and the only way to get most of those customers to not feel ripped off is do another groupon or offer some similar huge discount.

I think the cleaning business is probably hoping for referrals.

And that is true, but referral making is largely akin to a pyramid scheme. I also think that if the referrer is talking about their 19 pound groupon, the refer-ee would likely balk at the price as well.

I signed up to GroupOn (UK) earlier this year

I unsubscribed from their emails after a month as all the offers just seemed to be either

a) Cosmetic treatments b) Health checks from private clinics

I'm a 24 year old male, why do I give a shit about any of those things? GroupOn needs to target their offers more

Groupon and their clones are basically the equivalent of coupons on the back of a supermarket receipt.

Nothing new here.... but it has been very profitable.

...for Groupon! Not so much the retailers though.

Not for Groupon (which loses money) but some of it's investors have done OK out of it - so far.

Isn't it the other way round? Groupon seems to believe that due to the name recognition, they'll become profitable at some point, and even then the business model is heavily reliant on the IPO. The retailers are drumming up a ton of business though.

http://www.bloomberg.com/news/2011-11-03/groupon-said-to-rai...

I think a lot of people misunderstand what Groupon offers a business. Basically it's advertising, but in a way that makes it affordable for small businesses. The company offering their deal, is putting their name out there, and only has to pay for it when someone walks through the door an makes a purchase.

Tradition advertising means paying for your brand to be seen. Magazines, newspapers, ect can target markets, but not to a very large extent. Google, Facebook, ect can target their market better, and businesses only pay when someone clicks (ie shows a bit of interest in the company). This is why they are stealing traditional advertising revenue. Groupon took this one step further, and made it so that businesses only pay when a customer walks through the door. This opened up advertising to much smaller businesses, Mom and Pop shops, since there is no upfront cost.

You'd think that Groupon would be trying to target their deals better. Have a "select your interests" when you sign up. Yipit is doing this, and it's a pretty cool take on it. That type of service adds a lot more value then a generic daily deal.

It would have been advertising if it had a longlasting effect.

Consider that once you do a groupon for a 20% < discount, it is going to be very hard to get that customer again for the full price of the product. So what do you get from the supposed advertisement? A single customer that may or may not give you his business again.

That's not advertising. That's what's crassly known as 'opening your legs'.

That's exactly what advertising is. You're paying for exposure and a chance that you can convert him to a lifetime customer. You can say the exact same thing about Adwords, and display advertising. You pay for each click that may or may not give you a single sale, let alone a lifetime customer. You pay for an impression that may not influence a customer's buying decision in the future...

Groupon may be a bad form of advertising for most businesses.. but it's still advertising.

You are absolutely correct. But Groupon doesn't give that impression. The impression you get from a Groupon is "I got this really good deal for $10, why would I want to return for $20?"

In a classic ad the full price is stated upfront. You convert your customers on that, not on a completely unsustainable one-time deal.

Yep, you are right. It dilutes your brand. It's a reason why most luxury brands like Prada and Louis Vuitton stay away from flash sites like Gilt and RueLaLa as well. It's also why Apple rarely has sales on iPods or iPhones.

By giving out discounts, you're training people to expect deals forever, and that's unsustainable.

Treating GroupOn (and similar costs) as advertising/marketing is indeed the correct approach and certainly one the company pitches.

However, something worth considering: is the GroupOn audience worth buying? Anecdotally the answer seems to be "no" as repeat business is well below expectations, regular customers use the coupons, customers will use coupons at times when you'd otherwise be busy and the typical profile of the GroupOn customer suggests they tend to spend the absolute minimum for the coupon.

Honestly I'm shocked the GroupOn IPO is oversubscribed. Still, probably not bad for an opening day sell.

I'd love to see solid numbers on what percentage of their sale price companies are spending on different forms of advertising.

Considering the general bargain hunting nature of Groupon-derived customers I wouldn't be surprised if they're possibly the most expensive and the least converted advertising business out there.

From TFA: 'a [GroupOn] spokesperson said it was "difficult to give an accurate figure" for how many businesses are repeat users of the site.'

Really? I would have thought it would be pretty easy to run a query on their accounts and find out a nearly exact number.

I think it's one of these situations where it's not difficult to calculate, but it's difficult for them to release the figure. I suspect it would clearly indicate the malcontent of small businesses. "0.5% are repeat users" doesn't really bode well for you if your company is looking at an IPO.

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