Marius on Strategy and Communication

What it says on the tin

Groupon, Schmoopon

Is it just me or are all these group-buying sites getting a bit watered out?

In the beginning there was one decision to be made each day; one email containing one deal. And the deals were great! Exclusive, too-good-to-be-true deals which you had to jump on not to miss out on. It was also something deceptively enticing about the fact that a large number of people were required for the deal to be activated. I never did, and still don’t, understand the rationale behind this, but as I said, it was deceptive (has a deal ever not been activated?). This sense of exclusivity was effective in ‘justifying’ the enormous discounts – often more than 90% off – and it saved the brands from devaluation in the minds of consumers.

In the early days I jumped on a few offers thinking I can’t afford not to, and I always had good experiences when I redeemed the coupons. Well, the days of urgency are over. From receiving one email per day, I get about half a dozen, some of which contain a dozen or more deals. Sure, I did sign up for them all, but so did everybody else, and the amount of emails has devalued the value of the group buying concept itself, along with the brands they represent. While the deals are still good and I still scan through them, what was once a unique concept now feels more like a pile of catalogues. Read betwen the lines and it simply tells you what stock needs to be dumped and what services are so ridiculously overpriced they can sell for 5% of the original price. They are getting dangerously close to junk mail and I will probably soon unsubscribe to them all.

With the influx of a-deal-a-day concepts, the products and services they offer have lost their value in consumers’ minds. What the retail sector started, these emails are taking to a new level. 70% has become the new full price for a range of categories, predominantly restaurants, beauty/health services and photo printing services (off the top of my head).

There’s also no sense of urgency anymore. I’ve seen deals from the same places repeatedly; a Japanese $30 ten-course dinner was up for grabs daily a few weeks ago. Why jump at it and risk never getting around to redeeming it when you can wait until the moment you crave for a ten-course Japanese meal? Plus, you’ve now got several days to decide! I talked to a friend yesterday who needed a haircut, while I mentioned I wanted to take a photography course. We both joked about how there will soon be a deal on for both, so we might as well wait until we can get it almost for free. In other words, we don’t jump on deals spontaneously to try something new (and thus potentially becoming new and loyal customers), we purchase what we would buy anyway; and would’ve paid full price for, hadn’t we been taught to wait for a deal.

The biggest losers however, are the ones nobody feels sorry for; i.e. the Google’s of this world who bought the Groupon’s of this world for astronomical amounts ($1-6bn…nobody knows). They certainly fell victim to the sense of urgency and rushed to form a group of buyers and jumped on the deals before they had time to think. Perhaps they were the real targets all along. Then again, Google is smarter than me and knows some things that I don’t…

groupon

(In the short time it’s taken me to write this, I received three more group-buying emails; a warehouse clearance with 1000s of items(!), one $19 Indonesian all-you-can-eat buffet for two which I’ve seen many times before (plus a bunch of extra offers once you open the email), and one photo print offer (plus 22 other offers))

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This entry was posted on May 24, 2013 by in Uncategorized.
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