Jump to content

      













Photo

Groupon, Couvon and other daily deal and mass-buy companies


  • Please log in to reply
230 replies to this topic

#41 spanky123

spanky123
  • Member
  • 10,321 posts

Posted 10 January 2011 - 01:28 PM

They must have one huge Adwords bill. Can't possible see what else they could spend nearly $1B on.

Interesting that today's "Victoria" deal is actually a web service.

#42 Rob Randall

Rob Randall
  • Member
  • 8,798 posts

Posted 14 January 2011 - 08:56 AM

Groupon's chief executive recently estimated that 500 imitators have popped up since the site got big. That raises a question: Is this the start of a group-deal boom or a group-deal bubble? Or is it something else entirely?

http://www.slate.com/id/2280963/

"[Randall's] aesthetic poll was more accurate than his political acumen"

-Tom Hawthorne, Toronto Globe and Mail


#43 VicHockeyFan

VicHockeyFan
  • Suspended User
  • 52,121 posts

Posted 14 January 2011 - 10:08 AM

http://www.slate.com/id/2280963/

That raises the question of what comes next. Will Groupon and LivingSocial prove to be category killers, squashing those 500 little competitors with their wittily written ad copy and awesome deals? Will dozens of new competitors proliferate? Will fierce competition among Groupon, LivingSocial, and their rivals thin margins for all the group coupon sites, forcing some out of business? Will a new form of local or social advertising, perhaps one backed by Google or Facebook, come in and blow all of them out of the water?


The difference between Groupon as a coupon site, and Facebook as a social site, is that EVERYONE is on FB. There is no reason to be loyal to Groupon. I think a Google or FB-backed coupon site could really kill many off, but in general I think they will all fade.
<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#44 Bob Fugger

Bob Fugger

    Chief Factor

  • Member
  • 2,981 posts
  • LocationSouth Central CSV

Posted 14 January 2011 - 10:19 AM

The difference between Groupon as a coupon site, and Facebook as a social site, is that EVERYONE is on FB. There is no reason to be loyal to Groupon. I think a Google or FB-backed coupon site could really kill many off, but in general I think they will all fade.


We're thinking of doing a Groupon for our slow period, post-Valentine's through March (although the validity period will be 6 months). Just a quick straw poll, if I may: who amongst you would visit The Fernwood Inn, if you were able to buy a $10 Groupon that was redeemable for $20 worth of food/drink?

#45 VicHockeyFan

VicHockeyFan
  • Suspended User
  • 52,121 posts

Posted 14 January 2011 - 10:25 AM

We're thinking of doing a Groupon for our slow period, post-Valentine's through March (although the validity period will be 6 months). Just a quick straw poll, if I may: who amongst you would visit The Fernwood Inn, if you were able to buy a $10 Groupon that was redeemable for $20 worth of food/drink?


I would.

But Fugger, why would you?

You are planning to give away $20,000 worth of food for $5000.

Why not run a TC ad for $5000 that includes a 50% off coupon. That'd be the same cost, although you have upfront costs. Goes to 75,000 subscribers that mostly are not on Groupon's 43,000-person mailing list.

I gotta be honest with you, if I only eat out once a week, I'd just use Groupon, you'd never get me as a return customer at full pop, because I'd be Grouponing every single week of the year, no time to come back to you.

I have four restaurant clients, and I'm advising every one of them against Groupon.

Here is a better model. Find a non-food retailer that is willing to give a $20 FI GC with every purchase of, say, over $50 at their store. They can advertise the deal in-store, and when each coupon is redeemed, you bill them $5. Same cost as your Groupon deal, but again, your GC does not go to someone that gets a new 50% off restaurant deal in their e-mail at least once a week. They are effectively giving a 10% discount on their sale, but they get buyers to potentially add up their purchases to get over the $50 threshold. Win-win. No up-front cost to you, none to them, except some printing and PoS materials. Some GCs (as much as 25%, depending on how short you make the "redeem-before" date) never get cashed, so no harm to either of you, in fact the retailer than finds he is giving less than a 10% discount.
<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#46 Nparker

Nparker
  • Member
  • 21,131 posts

Posted 14 January 2011 - 10:25 AM

Just a quick straw poll, if I may: who amongst you would visit The Fernwood Inn, if you were able to buy a $10 Groupon that was redeemable for $20 worth of food/drink?


I would. Then again I would pay $20 for $20 worth of food/drink at the FI. :)

#47 VicHockeyFan

VicHockeyFan
  • Suspended User
  • 52,121 posts

Posted 14 January 2011 - 10:47 AM

http://www.facebook....464478

Groupon Coupons: Groupons are a new craze amongst consumers, but as CHEK News' Kylie Stanton reports, some local businesses suffered from the popular coupon.


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#48 OSJ

OSJ
  • Member
  • 311 posts

Posted 14 January 2011 - 11:05 AM

the groupon lady(Staci) calls me a few times a week as well. i have been skeptical since the begining.
i feel the same way, people will not be return customers or they will be my regular customers already just trying to save a buck.

also, why do i want my tables full of groupon customers int eh summer and have to turn away full price paying customers?

#49 manifest

manifest
  • Member
  • 23 posts

Posted 14 January 2011 - 11:14 AM

I'm going to be starting (yet another) Groupon clone in Victoria later this month. However, I'm only going to be giving discounts to restaurants and other food related businesses instead of spas, gyms, etc.

I agree that it's hard to make a profit when Groupon takes a 50% commission on top of the 50% discount. That's why I am making the commission I charge 25% in hopes to attract more restaurants to run a deal with me.

I do like the contrasting views in this thread and would really like a few comments on the feasibility of my idea.

I am also aware that a lot of people only use Groupon for the discounts and never go back to that establishment. Obviously this is a problem, but even if only 10% of the people who used coupons come back and become regulars, doesn't that make it worth it? You can't deny that it is amazing advertising, even if you do lose money in the short run. I don't find that traditional advertising works anymore. I can't remember the last time I watched a commercial now that I PVR everything.


PS. Since I'm new here, I can't use the PM function. If VicHockeyFan wouldn't mind talking to me about some specifics I would be extremely grateful. I think the contrasting views would help me improve my business to help out businesses as well as customers.

#50 VicHockeyFan

VicHockeyFan
  • Suspended User
  • 52,121 posts

Posted 14 January 2011 - 11:22 AM

the groupon lady(Staci) calls me a few times a week as well. i have been skeptical since the begining.
i feel the same way, people will not be return customers or they will be my regular customers already just trying to save a buck.

also, why do i want my tables full of groupon customers int eh summer and have to turn away full price paying customers?


Yup, I like Staci, but she has yet to convince me of a big benefit. She said she would have some local Groupon business participants call me with their rave reviews, but none have yet.
<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#51 VicHockeyFan

VicHockeyFan
  • Suspended User
  • 52,121 posts

Posted 14 January 2011 - 11:24 AM

edit.
<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#52 manifest

manifest
  • Member
  • 23 posts

Posted 14 January 2011 - 11:55 AM

Sent! Thanks a lot. I appreciate it.

#53 spanky123

spanky123
  • Member
  • 10,321 posts

Posted 14 January 2011 - 12:36 PM

Anyone know how groupon works technically from a merchant perspective?

Is there some code that needs to be entered into a computer to validate a certificate? If so, what do shops without a web terminal do to prevent someone just copying the coupon?

#54 VicHockeyFan

VicHockeyFan
  • Suspended User
  • 52,121 posts

Posted 14 January 2011 - 12:47 PM

Anyone know how groupon works technically from a merchant perspective?

Is there some code that needs to be entered into a computer to validate a certificate? If so, what do shops without a web terminal do to prevent someone just copying the coupon?


I'm not sure, but I suspect that the merchant has a list of coupon serial numbers they can print off and work from manually. Check it off as it is redeemed.
<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#55 Bob Fugger

Bob Fugger

    Chief Factor

  • Member
  • 2,981 posts
  • LocationSouth Central CSV

Posted 14 January 2011 - 01:07 PM

I would.

But Fugger, why would you? You are planning to give away $20,000 worth of food for $5000..


Well, yes and no. You're assuming that $20k of sales actually costs me $20k. As you know, it doesn't (otherwise, there would be no restaurant industry). It costs me food and liquor cost, which I get to spread over the validity period of the coupon. So that $15k difference is actually less than that, as I'm taking is actually less than that and spread out. Compare that to traditional (print/radio/TV) advertising, where I have no idea as to the effectiveness of the advertisement.

In addition, let's say I set it up like the recent Flying Otter Couvon deal: $20 coupon that costs Couvoners $10. Redemption is limited to 1 per table, cannot be redeemed in conjunction with any other offer (e.g., wing night) and has no cash value. In addition, because it is a coupon (and not a gift certificate), it cannot be used towards tax or tip and can expire.

If you assume that the average Couvoner will purchase an entree and a beer, they are going to be around that $20 mark. Also assume that they won't be dining along. So the overspend produced by the Couvon transaction is net new business at full price, that may or may not have eaten there that night. As well, if you cheap out and keep your order under $20, the rest is lost. Additionally, just like any other coupon (whether it's free or you buy it, e.g., a Coupon Book), there is a percentage of folks who obtain one and do not redeem it = free money.

As for your argument re: repeat clientele - yeah, I agree: how do I know 1) If they will come back?; and 2) If they are a new client or an existing client taking advantage of a promotion? I suppose the answers are anecdotally (which isn't ideal) and who cares, provided they are in here spending money?

Also re: your point about teaming up with non-food establishments. Sure, that would work and could be more advantageous: however, that too comes with a cost, i.e., staff time used to hustle and set up arrangements with other businesses. And it seems like a real hassle to reconcile what's out there. Groupons/Couvons are coded, which means one redemption, only.

I appreciate you pushing the argument against group buying, VHF, because to be honest, I haven't quite drank the Kool Aid on it: I am still skeptical. But given the trying times for the hospitality industry in this province, I think that it's something that we'd be willing to try once. Groupon states that 97% of their merchant clients come back for another one. That remains to be seen.

#56 groceryalerts

groceryalerts

    groceryalerts

  • Member
  • 31 posts

Posted 14 January 2011 - 01:42 PM

Yup, I like Staci, but she has yet to convince me of a big benefit. She said she would have some local Groupon business participants call me with their rave reviews, but none have yet.


That is funny.

I am struggling trying to get VictoriaVIP.com going - same idea ad Groupon except the business chooses where part of the proceeds goes to.

The website would not take anything - I want to use this to help local charities and everything is done using Facebook authentication (no payment processing).
Grocery Alerts Canada: Coupons and Grocery Deals.

#57 spanky123

spanky123
  • Member
  • 10,321 posts

Posted 14 January 2011 - 01:54 PM

Groupon states that 97% of their merchant clients come back for another one. That remains to be seen.


Can't see how that could be true or else we wouldn't be seeing new advertisers each day.

You are making a pretty good argument as to why a consumer should not pay $10 for their coupon. It expires, it can't be used for tips or tax, and likely won't come anywhere near to covering the actual cost of anything I eat or drink. Might as well stick with my 2 for 1 deals from the local coupon book :-(

I agree though that for a business it has a low cost of entry.

I note that Swarmjam has been outselling Groupon in Victoria for the last week. Tells you how much traction first mover gives you in this market as Swarmjam has been out for what - a month?

#58 groceryalerts

groceryalerts

    groceryalerts

  • Member
  • 31 posts

Posted 14 January 2011 - 02:05 PM

Can't see how that could be true or else we wouldn't be seeing new advertisers each day.

You are making a pretty good argument as to why a consumer should not pay $10 for their coupon. It expires, it can't be used for tips or tax, and likely won't come anywhere near to covering the actual cost of anything I eat or drink. Might as well stick with my 2 for 1 deals from the local coupon book :-(

I agree though that for a business it has a low cost of entry.

I note that Swarmjam has been outselling Groupon in Victoria for the last week. Tells you how much traction first mover gives you in this market as Swarmjam has been out for what - a month?


The quality of the deals has swung to Swarm Jams way - good analysis.
I agree (I enjoy the Entertainment book and the price gives me great selection).
Grocery Alerts Canada: Coupons and Grocery Deals.

#59 manifest

manifest
  • Member
  • 23 posts

Posted 14 January 2011 - 02:07 PM

Today is the only day I have seen SwarmJam outselling Groupon.

Today is also the only day I have seen a SwarmJam I'd actually want to buy. Add that to the fact that Groupon's deal isn't an amazing deal today (you have to pay fuel fee, research fee AND taxes) and it's no wonder they are being out sold.

Personally, I don't think SwarmJam has done a very effective job of getting the word out. They are owned by a pretty large company and the only reason I know about it is because I am trying to enter the business. But then again, my site is a couple weeks away so I have no idea how hard it will be to gain traction. All I can hope for is that my advertising campaigns work and my site becomes viral in Victoria. I hope to accomplish this by providing deals people actually want to buy. I only started pre-registrations a couple days ago but the initial response is pretty good so far.

Bob, if the Fernwood Inn would like a trial run on a smaller site before trying to get a Groupon deal going, I would love to talk about it.

#60 VicHockeyFan

VicHockeyFan
  • Suspended User
  • 52,121 posts

Posted 14 January 2011 - 02:18 PM

Also re: your point about teaming up with non-food establishments. Sure, that would work and could be more advantageous: however, that too comes with a cost, i.e., staff time used to hustle and set up arrangements with other businesses. And it seems like a real hassle to reconcile what's out there. Groupons/Couvons are coded, which means one redemption, only.


$250 per business would pay my consulting fee. 20 businesses set up x $250 = your $5000 Groupon "fee" for a one-time coupon.
<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

You're not quite at the end of this discussion topic!

Use the page links at the lower-left to go to the next page to read additional posts.
 



0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users


To advertise on VibrantVictoria, call us at 250-884-0589.