Looking For the Next Best Deal? Click, Purchase and Shop For Less Using Groupon

Established in November 2008 as a publicity held company, Groupon’s goal was and still involves providing consumers with a one-stop location for online deals with massive discounts (Groupon). Available to consumers in more than 48 countries, Groupon offers companies the chance to market their company to people in an effort to gain awareness and introduce people to their services (Groupon). All one has to do is log onto www.groupon.com or if easier (and yes it is) use a smartphone with the Groupon app to see all of the daily and Groupon Now deals offered in their area for the designated amount of time.

As a daily (and I mean daily) Groupon user who has actually decreased the amount of deals purchased, I like what the company offers. From the local eateries in my area to the beauty, sports, fitness, retail and other deals, Groupon gives consumers such as myself a vast amount of discounted treasures to explore. I for one purchase the Groupon’s offered by The Body Shop, La Peer Beauty, movie tickets (e.g. the then $5 tickets to see The Lincoln Lawyer), $5 magazine subscriptions, yoga, restaurant deals and more. What I purchase are things that interest me and I actually use. What is also great about Groupon is that consumers have 24-hours to get a refund on any purchase, plus any expired Groupon retains its original value.

With the ups and downs of our economy, so many people (that I know) who are financially settle and just making by are using online deal sites like Groupon to explore and enjoy new products, food and adventures. Groupon has spurred other sites such as Living Social, Yipit and high-end sites Gilt City and Jetsetter to offer consumers access to a bevy of deals as well. Some of these deals include international travel to exotic locations including Fiji, Australia, Cabo San Lucas, Turkey and Morocco. Why pay a travel agent to research and book a trip when it can be done with one single click and purchase from a computer or cell phone.

Online shopping appears to have become a staple part of many people’s lives. Companies such as Groupon are taking advantage of that by giving consumers options that can’s be beat. Everyone likes a great deal, right?

Reference

Groupon’s About Us. Retrieved on June 23, 2012. http://www.groupon.com/about

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9 Responses to Looking For the Next Best Deal? Click, Purchase and Shop For Less Using Groupon

  1. Neda Assadi says:

    I haven’t been on the Groupon site in a long time, so I decided to go after reading your post. Just a quick catch up to see what’s new. I want to let you know that I just bought something! It took me about five minutes. Now that’s the power of social media persuasion. What did I buy? A canvas of the Golden Gate Bridge. I’ve been wanting to get a canvas of the Bridge for a very long time (San Francisco is my favorite city). It was fate to stumble upon the deal, and I felt like I had to get it.

    Groupon is an excellent example of customer engagement at its most powerful stage. The website succeeds because it creates unique deals and integrates a sense of urgency for the consumer. When I went to the site and saw the canvas, Groupon alerted me that I only had 1 day, 6 hours, and 52 minutes left to purchase the deal. It also told me that over 800 people purchase the deal.

    Groupon makes a deal attainable and realistic by adding a countdown clock and telling consumers how many people have bought the deal. When I saw that countdown clock, it made me stand in the middle of saying yes or no, and ultimately choosing yes because I didn’t want to delay the purchase and either miss the deadline or have the item be sold out.

    The interface is clean and easy to use, with various channels to share a deal. You can “like” a deal via Facebook, buy a deal for a friend, Tweet about the deal, or send the information via e-mail. Basically numerous forms of online media are readily available to use in order to promote that Group brand.

    Now with these social media / sharing initiatives, we have once again encountered the power of the (free) brand advocate. No blue box as Seth Godin would say. Groupon is that purple cow worth talking about. I’ve heard people in my office mention a particular deal and have seen Facebook postings as well. Give people something unique and they will run with it. Over 500K Facebook “likes” and 4.5 million users have installed the Groupon app on their smart phones.

    In regards to the type of services and products offered, are there any that you wouldn’t include? As in, would it actually hurt the brand to promote via Groupon? As an example, in your post you mention $5 tickets to see The Lincoln Lawyer. Thank you for bringing that up – I remember reading about that deal and cringing. I do not like the idea of promoting movie tickets on Groupon. It devalues the craft of moviemaking. I work in marketing at Universal Pictures, and the idea of cutting a ticket price in half just to get seats in the theater is disappointing. Marketing works hard to create campaigns that are unique and have a voice. We basically infuse art, music, and psychology to give the consumer an understanding of what a film is about. It’s how we generate interest. Social media platforms, radio, television, and out-of-home ads drive that interest. Those are appropriate channels to get people in seats.

    If you start selling $5 tickets, what message does that send to the consumer? To me, it screams, “Hey this movie isn’t that great. We’ve really got to sell seats, so can you just buy it? It’s only 5 bucks.” Imagine selling a movie like The Dark Knight Rises for $5. Not happening – the movie has an incredible pedigree and enormous interest from moviegoers. So while I understand it depends on the film, I still don’t agree with discounting tickets for ANY new release film. Brings down the value of something that can create realism, escapism, or both.

    Other than that, I love the Groupon site and think it does wonders for businesses looking to generate more awareness, interest, and action amongst consumers. And for consumers it opens their minds to new opportunities – new trips, activities, and restaurants. A beautiful idea of information sharing between organization and consumer(s).

    What do you think, and are there any other products or service you don’t believe would fit well on the Groupon site?

    • Josh Hunt says:

      Very thought provoking coment Neda. I latched onto your idea of things that my not be appropriate sells for Groupon and I started looking around for what seemed to fit in that category. I went through a number of online shopping sites like Amazon, Ebay, etc. and here is basically the thought that kept comming up.

      There is an intrinsic value to most things that is understood by consumers. This is probably connected to how frequently people make similar purchases.

      Keep in mind this is just a hypothesis, but my idea is this: I know what the value of a gallon of fuel is because I make that purchase regularly and I am comfortable with it. Likewise, if I am in the market for a t-shirt, I know enough to know (for me at least) that $5 is a good deal, $25 is over priced, and $.50 means there is probably something wrong with it. Additionally I understand that for an item like shoes or t-shirts you “get what you pay for” to a certain degree. I also have the understanding that a cheap Groupon deal for a sushi restaurant does not mean anything negative about the quality of the fish (I suppose this because of the fact that the business would not last long if it was selling “cheap” fish). So it seems that there are some type of items that we understand could be of inferior quality based upon the price we are getting them for (t-shirts) and some that we trust will be of adequate quality regardless of the deal we get on them (sushi) and this is because of the infered reliability that a broker like Groupon has.

      My second quick point goes to your spur of the moment purchase that you made on Groupon (I loved reading about it). I am a visual artist and here is a bit of an inside fact about how I price artwork and the logic that goes along with it. I know that people do not purchase art frequently, I also know that “value” can be subjective in the art world and that how an artwork is precieved is more important than how that artwork “is” (like a stock share in a sense). So, when I have a gallery opening where I am selling original artworks I will over price 10% of the paintings (example:I have 20 pieces that I am willing to sell for $1,500, I will price 2 for around $4,000). Two things happen every time I do this: first, the more expensive paintings sell first, without fail because they are precieved as being more valuable. And secondly, once those are noted as sold, it is much easier to sell the less expensive ones becasue there is perception of value.

      Original artworks probably won’t be showing up on Groupon anytime soon because people do not purchase art very regularly. But if they ever do, there is a fascinating numbers game to be3 played in order to placed the appropriate perception of value on them.

  2. Jake White says:

    Thank you for the Groupon blog. I recall when the service first launched that it created quite a buzz. This form of targeted marketing based upon geographic locations and even interests has opened a new door for consumers and retailers. Groupon has made an impact (similar to Google Adwords) by providing businesses with a vehicle that can target audiences in an effort to create awareness and increase profits.

    I purchased a Groupon for a local pizza establishment. When I asked the proprietor how Groupon had affected his business I received an interesting reply. While the promotion certainly brought numerous new customers in a short amount of time, he actually lost money due to the significant discount provided and fees required to post the coupon. He stated that the real evaluation will come months later to see if Groupon customers liked his pizza and become repeat customers.

    I tried to find statistics on average return rates of Groupon customers but came up empty handed. Do you think that Groupon users take advantage of the discount then move onto the next offer or actually become loyal customers of the services after the first purchase?

  3. Megan Irish says:

    This is an interesting post on Groupon. I remember first learning about the site and buying deals non-stop for a few weeks. The deals seemed great! Who wouldn’t want $30 in food for only $15?! I ran into the problem of holding on to deals too long. If you purchase a few that go to waste, the site does not seem so great for a while!

    I am slowly getting back into the Groupon swing though. I have recently purchased a few and actually used them! It is a great way of getting out and exploring new activities. I recently bought a Groupon for a yoga class and enjoyed it so much that I purchased a year membership. It is a great outlet for those of us on a budget to try new things.

  4. Xiomara Moncada says:

    I LOVE GROUPON!!! I get their daily deals and I as much as time allows, which is not too often take a look at the deals. I have found great movie deals, a great coffee maker that gets me through long night of studying and bowling deals that my daughter and friend enjoy with me. At the time when I used Groupon the most, I was single and I loved the deals and the money I was saying. Since I started school I haven’t shopped Groupon but I am planning on taking advantage of the deals that it offers.
    You are so right Crystal, in this economy it’s great to have a company like Groupon that you can depend on and get your moneys worth even when you don’t use the coupon. This is a true savings. Thank you for your post. I agree everyone likes a great deal! I for one LOVE great deals. 🙂

  5. jsutterf says:

    I really enjoyed the Groupon post. I had no idea that they were in 48 countries. That is very impressive. I have seen some really good deals advertised on Groupon. I think it is a great way for many small business to offer deals and get exposure through the site.

    I would like to find out how many people purchase the Groupon coupon and then do not use them. I wonder if Groupon tracks this kind of information.

    Joshua Sutterfield

  6. Great post! It is really relevant today because crowdsourced buying is so huge. However, how do you feel about the lack of return consumers at companies who have used Groupon? I think this is a huge problem because companies tend to actually lose money when they offer these deals. A similar company to Groupon, which is based in DC, is LivingSocial.

    LS has grown at a faster rate than Groupon and just announced last week that they are moving away from the daily deal business to focus more on brick and mortar purchasing development. I think this is a huge move and could shake the daily deal industry up. It’s especially interesting to learn which direction Groupon heads next because they pay investors and managers first before paying off other debts. Could the daily deal bubble burst?

    http://www.inc.com/caitlin-berens/livingsocial-moves-away-from-daily-deals.html

  7. Sogol Jafarian says:

    This was a fun read! Like you, I have also decreased the amount of Groupons I purchase. With so many companies following suit, like LivingSocial, Spreebird, and Amazon Daily Deals, it’s hard (and honestly, quite annoying) to keep up with all the “deals”.

    In the past I had purchased deals that seemed fun and exciting at the time, but a few months go by and without any time to call to schedule an appointment or to physically visit the gym, they expired and went to waste. I did go paddleboarding recently, however, with a Groupon I purchased a few months back and it was an amazing deal.

    On a more personal level, I know Groupon really helps small businesses. My boyfriend is a small business owner and he has a weekly deal that is available on Groupon.com every Tuesday. He anticipates an increase in the call volume and new customers stopping by because they purchased the deal through Groupon. Although Groupon takes a cut of the profit, it is a great way to expose companies to lesser known businesses and start ups.

    Another aspect of the company I admire is that it discourages companies from price gouging customers. There are ubiquitous deals available for massages or laser hair removal and in the past spas offering these services could charge any prices they wanted because people would pay for the experience. Nowadays, those established businesses may second guess charging ridiculous amounts for their services knowing that potential customers can go online and find better deals.

  8. Anna T. says:

    Josh,

    I have experienced Groupon from a number of angles: my company has sold Groupons and I, myself have purchased them. At first I bought a lot of them, but then realized that I was actually spending more money than usual because I was so excited about the deals! I had to unsubscribe from all those savings services and now visit them only occasionally.

    Groupon operates via the scarcity compliance principle. More specifically, according to Cialdini (2009) “…opportunities seem more valuable to [me] when they are less available” (Loc 4575, Kindle edition). Groupon tries to play on the scarcity principle by putting up time clocks and limited quantities. I would not be surprised if many customers, like myself, buy Groupons that they end up not using just because they are worried about not buying in before the clock runs out!

    In recent news, Groupon’s stock dropped this Wednesday to the lowest price they have ever been, according to the New York Times. It appears that things are not looking good for Groupon. The New York Times also noted that “…investors have long been wary of the company, skeptical that its business model will prove profitable in the long run and that its current management team is capable of leading a major public corporation.” Recently Groupon has shown poor control of its internal financial affairs, including a recent restatement of its earnings. To be truthful, I am uncertain whether Groupon itself will survive, but it does seem like there is demand for these fast deals.

    Sources:
    Cialdini, R.B. (2009). Influence: Science and practice. Boston, MA: Pearson Press.

    http://dealbook.nytimes.com/2012/07/11/groupon-shares-hit-new-low-in-latest-plunge/