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Posts tagged: Groupon

Groupon gains ground, thanks to merchants, like Spokane, repeating deals

Saturday's Spokesman Review and Spokesman.com featured a story on the popularity of last year's Groupon summer passes for Riverfront Park.

Since the deals were so successful a year ago, the city Parks Department just re-upped and approved a new 2012 set of promotions that will soon be promoted by Groupon. Of roughly 20,000 park DayPasses sold last year, 6,000 came via Groupon, the parks department records say.

We noticed on Monday that Groupon, which went public a year ago, is back in the swing. For awhile this year, there were concerns that the deal-per-day business model might be losing steam with customers.

The Wall Street Journal today posted a story showing that GRPN is up 9 percent, based on heady forecasts for repeat business from merchants. (May require subscription)

The online story noted:

“New data show an increasing portion of deals offered by the Internet couponing leader are being run by merchants it has worked with previously. According to research firm Yipit, repeat merchants drove 56% of the gross billings generated by Groupon's core local-deals business in the first quarter. That was up from 49% in the fourth quarter and 33% in the third. The data track only Groupon's North America business, about 43% of its total. But the trend is good.

Groupon's biggest critics have argued that merchants lose when they run daily deals, attracting bargain-seekers that don't convert to regular customers. The new data suggest that isn't the case.

And if merchants are coming back on their own, Groupon may be able to save on sales expenses to drum up new deals. That could provide operating leverage as it becomes more difficult to squeeze efficiencies out of other expenses like marketing.”

Is Groupon a good deal, or really just a money-losing loan?

Area businesses are certainly among those who are debating the whole Deal a Day system, of which Groupon is the most obvious example.

For many business owners, the question is: Is it worth my time and (lost) money to accept a Groupon deal, hoping to build customers.

Here's one very strong NO answer from digital marketing guy Rocky Agrawal, who is convinced Groupon is a “very bad” business decision for most managers and owners. He says: “In many cases, running a Groupon can be a terrible financial decision for merchants. Groupon’s financials also raise questions about its ongoing viability.”

The full take of the commentary, on TechCrunch, is here.

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