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I’ve said quite a few positive things about Groupon the past two years…
Following its entry into the KC market, business owners I interviewed spoke highly of it. Said the people who buy Groupons – half off coupons usually – are upscale, bring friends, spend money, tip well and become repeat customers.
And with hundreds of thousands of locals on Groupon’s email list, it’s also good advertising, businesses say.
With rare exception, members of the comments crowd totally disagreed.
Giving stuff away for half price devalues the product, they say. Pisses off people who pay full price. It’s just bad business.
Well, if it’s so bad, how come everybody in the free world is doing it?
There are so many Groupon wannabes of late, it’s getting hard to keep them straight. There’s Muncharoo (queerest name since KanRocksas, although they got there first). Living Social, CrowdSavings, DailyDeals and many more.
And most recently, the Kansas City Star’s DealSaver.com.
While it’s unlikely the Star will be the last one to the half-price party, clearly it came late.
As evidenced by a check of its DealSaver’s "past deals" page.
There we find – even with the newspaper pimping daily DealSavers on its front page and in giant print ads – a lengthy list of failed giveaways.
Let’s take a look.
With millions of readers each week, only 16 deals sold for Jaskki’s Tobacco Cafe. Four for Girlfriends The Salon and just 51 for the well-established Joe’s Pizza in Westport. Sixteen for RSVP Medspa. One for Patty Rymer, Esthetician. Celsius DermaSpa sold four. Draft Horse Clothing, 13. Gina’s Sew Crazy, 12. Lumbrite Teeth Whitening, 25.
And check this, Imagery in Werstport sold just 13. And that’s a very cool store.
And the KC Freedom Fest – complete with coverage from the news/entertainment side of the Star – sold just 15 half off three day passes.
If that sounds bad, Melissa Blayton sold only just $75 for $225 makeup and hairstyling services deal and Skin Solutions sold ZERO laser hair removal sessions.
Even totally hip, Mission boutique Lulu’s has justy two deals sold with under a day to play.
It’s not all quite that bleak…
Adams Chrysler Dodge Jeep sold just forty-six $39 oil changes and tire rotations ($89 value).
And there are some success stories, albeit few.
Stroud‘s sold out 1,000, $10 to get $20 deals. The Peanut sold 777 similarly. Cascone’s sold 525, $10 for $20s. And Waldo Pizza – a neighborhood institution – sold out 1,500, $8 gets you $16 deals.
A Star deal I’m watching and kinda recommending – Kansas City’s Ghosts & Gangsters Tour – has only 37 deals sold at this writing. It offers an introductory ghost hunt for half off at $20 and a three hour ghost hunt at half off for $30.
"Each ticket purchased per person includes training on how to use the same equipment you see on all of the paranormal investigative TV shows, as well as plenty of time trying to capture your evidence," the pitch reads. "All photographs and audio recording files will then be delivered to your house so you can continue your quest by reviewing the evidence at your leisure.
"You will be exploring The Chambers of Edgar Allen Poe Commercial Haunted Attraction. This place is really HAUNTED. It was proven to be so by TV’s Ghost Lab seen on the Discovery Channel!"
With Halloween approaching, what’s not to like about that deal?
Here’s the bottom line….
The novelty of the Groupon "experience" appears to be fading. Clever dealmakers like Muncharoo make it harder to guage their track records than the Star, but it appears that the market is starting to soften. That the novelty is beginning to fade.
Even Groupon has deals up that show only 28 and 10 bought (with 22 hours remaining).
Are Groupon and it’s many immitators destined to become the online junk mail of the near future?
That is the question!
Too Many Offers Now
Hearne makes a strong point. Groupon does well with entertainment values, cause they have around 400,000 people on their site just for KC. Which goes from here to Topeka, and east to almost St. Louis. So in cases like say Stanfords or a restaurant of note, that works. People feel they will come in town for that now and again, not so much with local tanning or things like that.
Now there are so many deals like them, but most have far fewer customers online. Living Socail is the next biggest they have over 200,000 buyers. The small ones have ten,twenty or maybe forty thousand people, who are less interested to begin with cause its a group of buyers online with the TV channel or radio station for other reasons, mostly tix give aways or free events, not to buy things.
Yeah I do see this market thinning out. Soon there will be Facebook as a market. I think Groupon and Social Living did the best overall.
Who Are These Businesses?
Part of the problem is that the majority of the businesses you mention in the story aren’t having success with these deals because they are either not well-known or their business is offering a product that few people would be interested in—the exceptions being the restaurants.
Really, how many people out there are getting laser hair removal or photo facials (what the fuck is that)? Then there are the boutique shops and spas/salons. Just a limited number of patrons, where the restaurants, most all of them have a very loyal following.
Most people who shop at those somewhat high-end boutiques/salons probably aren’t using, nor need to use, things like Groupon, etc.
I have no idea why Phil from Waldo Pizzwould even advertise.
You gotta order a pizza a 9AM, he is busy constantly.
Great product and jillions of repeat customers.
The customers he ALREADY had used the coupon.
Just sayin…
Find Groupon useful
We went to Chicago last summer and subcribed to the Chicago Groupon for a couple of months ahead of time and got a couple of great deals that made our trip a little cheaper. We also use Groupon quite a bit for Christmas and Birthday gifts.
Fatiuge
I took some of that Peanut offer, my first daily deal….got locked out of the Strouds deal…
$10 at Strouds will get you a chicken leg and Soda.
I’d jump on the Star’s program before Groupon…..that print coverage is pretty strong.
At the end of the day this is a local deal….somebody will get it figured out ..goof with the margins a little. Built in ATM machine…better than the turnpike.
Craig…I read Facebook and Yelp backed out of Daily Deals on Monday….after about 6 months.
Groupon is a .com venture that has never and will never make a dime a cash burner that desperately needs to IPO. Amazon and Goog may make a go of it.
The Star…
….is giving away $10 of free meat with their daily deal today. What’s not to like about that?
Good point, but with Groupon’s might – the number of people on its email list as Craig points out – many of these small businesses have been able to attract customers intrigued by their product or services.
And when you get right down to it, as you note, people who are going to go to a high end spa or salon may feel a little foolish showing up with a coupon that saves them little more than pocket change.
I agree. Waldo Pizza is a money machine. Guess they figured maybe it would bring in some new faces.
KC Star deals
The reason more obscure businesses do this on the KC Star is that Groupon can only offer a limited number of deals and they only choose the largest businesses so that they make the most potential money. The Star probably isn’t as selective and the big businesses will go to Groupon anyway. This, at least, gives small businesses a shot at this type of marketing by going with the Star. .
deals aren’t as good any more
the reason for the drop off in groupon purchases is that the deals just aren’t as good as they were a year ago.
it used to be that every few days you’d get a $60 groupon for $30 to a nice restaurant. or a $1000 groupon for $50 (j.j.’s on the plaza).
now they are pushing $25 groupons for $12 to blue stem. are you kidding me? that wouldn’t even cover the tip at blue stem!
i think businesses are starting to get wise that groupon devalues their product, and they don’t really get a boost in future customer loyalty.
You may be right. Nobody minds saving 10 bucks, but how much of an incentive is it when you know you’re going to drop $100 or more?