The daily deal site Groupon, was all the rage in the retail world just a year ago. It seemed that retailers had found the secret to success. Just give your product or service away, and watch the customers flow through the doors. Once they have seen your amazing offerings they will return again and again to buy stuff you CAN make money on. Why does small business, or any business fall for stuff like this? We talked about Groupon a few times here at this blog, and warned against getting involved with them.
Seems these days Groupon is losing staff and money at a fairly good clip. Their stock is down 75% from it’s November 2011 IPO and they are losing staff. I don’t have a lot of sympathy for Groupon, since they seem to be built on the backs of small businesses who for one reason or another fell under their spell. Usually it’s smaller retailers desperate for traffic flow that jump on board with Groupon in the hope that volume somehow trumps profit, or the quality of their offerings. It also assumes that people care only about “cheap’. I think the customers we are looking for don’t necessarily feel that way, and don’t respond to “price only”.
About Trey Pitsenberger
Trey is a nurseryman, author, and speaker.