A month in the life of a Groupon CityDealFriday, 06 May 2011 The Groupon lifecycle in the blink of an eye?At the recent Leinster v Toulouse barnstormer in Dublin, a continuous cycle of crowd behaviour piqued my interest. Everybody starts sitting down with a relatively equal and fair view of the match. The game kicks off and an exciting phase of play finally prompts an excited spectator to jump out of his seat to get the perfect view of what’s happening. In turn, more and more spectators jump out of their seats determined not to have their fair chance of viewing proceedings torpedoed by the early mover guy. Soon everybody is standing up craning their necks for a view of the game and the initial competitive advantage of the early mover has been eroded. Eventually everybody gets tired of standing and realises it’s more comfortable and sensible to sit down again. No permanent competitive advantage has been gained by the early movers or the late movers for that matter – everybody is back where they started. This is a 15 second cycle of behaviour from start to finish that could be an apt metaphor for the new breed of daily deals providers that have erupted in to our lives. In the month of April, I received 60 offers from Groupon City Deal and didn’t want to count the equivalent offers from other providers. Very few of them merited a read before deletion. Hair treatments, candlelit dinners 40 miles from where I live, Brazilian waxes, outdoor yoga, eyebrow sculpting, a trip to the races, the list goes on and on. I mean seriously – talk about the ultimate spray and pray. I detect zero intelligent assessment of my response or attitude to these offers and see no visible strategy for assessing how I feel about them, unless of course they read this post. TIP – add a Like or Dislike plug-in to your emails for quick and easy responses but don’t bother if you can’t use the information to fine tune your offers. As there is no evident supplier assessment either the strategy seems clear – recruit every retailer on the planet and make them hand over a lot of precious margin in return for an advert to the City Deal ‘subscriber’ base. The theory goes I suppose that a wedge of new customers will flock to your door and then it’s up to you to keep them. Just how you keep them when your neighbour will be next in the queue to undermine your ‘normal’ prices by 50% is anyone’s guess.
What I ask is in this for retailers in the medium term once the early mover advantage is eroded? And how can I the consumer tell which retailer is better than the next one when no vetting or quality assessment is offered? The whole model has a distinctly old school feel to it – think Yellow Pages and the sales pitch to upgrade to a larger display ad than your competitor. Is that what this is becoming – a web enabled Yellow Pages? If I was a betting man (and I am) I would have my money on Facebook Deals and Google to clean out the initial entrants in this space as they bring a much deeper layer of value to the process with their presumably Nasa style algorithmic matching, detailed customer insight, and location matching.
PS – while off the beaten track of prepaid there is a link – the expiry date on a lot of these coupons in some cases is as short as 90 days so I’m guessing there’s a significant breakage play behind the scenes.
What is your experience and view on this new phenomenon?
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