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Dec 1, 2010
The latest rage in online coupons is blending retail offers with social media. The biggest beast in the category is Groupon, the daily deal distributing company that just went nationwide. To show how hot this area is, consider that Walmart is launching its own rival service, called CrowdSaver, and another competitor just launched this summer in San Francisco, called Blissmo. Auction site eBay is partnering with Groupon, and there is even one fellow who is attempting to survive for a year by subsisting on Groupon coupons alone. According to its site, Groupon now has over 15 million subscribers in 95 U.S. cities.
Coupon sites like Groupon, LivingSocial, and Screamin Daily Deals typically offer very deep discounts. Coupons for 50 to 90 percent off are quite common. These are available for only a very limited time, typically a day. Retailers offering the deep discounts are happy to do so because of the tremendous reach the deal sites offer. In Los Angeles alone, for example, Groupon reaches 500,000 subscribers. That reach is multiplied when users post the story of their deals on social media sites such as Facebook and Twitter.
However, some critics say that the deals do not result in repeat customers, somewhat defeating the purpose. There is also the possibility that retailers will lose money on the deals, especially if a great many people take advantage of the offer. Some retailers limit the number of offers that can be redeemed, but that tends to anger customers who fail to get a coupon. Groupon, however, claims that 95 percent of businesses using Groupon were satisfied with the service, would use it again, and recommend it to other companies.
Topic: Wholesale News
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