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Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

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Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#91
post #87

I've never heard of this negative reaction to Groupon like you folks are describing. What was the negative side? Was it not a good advertising investment for companies? Were expectations not being set correctly by Groupon? Do they take too much of a cut? Are they just jerks to the companies? Is there room in this space to not be a shitty actor?

Let me guess: Groupon agents (who got a commission?) would push for the best deal possible; naïve pizza joints and dry cleaners would do it. Response would be overwhelming, leaving the company broke after a month. Rinse and repeat.

There was nobody in the process who would/could responsibly manage the actual value of the coupon. So they were either useless or debilitatingly lavish.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#92
So on what contract were these 1100 people employed? 0 hours guaranteed, get in and get paid for the hours you work and your contract can be terminated any day? It always baffles me to see a thousand(s) of people getting laid of with the flick of a finger. That's like an equal amount of people added to the economy unemployed, right now.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#94
post #70
post #41

Earlier quoted context omitted.

I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get, but I wonder how much of that was the way they treated the new customers that the groupon generated.

> I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get I think that's just a misunderstanding on the stores part. A groupon is just another form of advertising (which costs money) - but businesses believe that by offering groupons they will come out ahead. I've pers…

If it is a common misunderstanding on the stores' part, I think it's Groupon's job to manage that. If an organization is set up to sell the product to the wrong customers, that organization should fix their sales process.

But I suspect it's a correct understanding on the part of the employees. When I talked with servers at restaurants, their experience was that the average Groupon customer was demanding, cheap, and a bad tipper. And they were also unlikely to come back, meaning there wasn't a lot of incentive to invest in a relationship.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#95
post #70
post #41

Earlier quoted context omitted.

I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get, but I wonder how much of that was the way they treated the new customers that the groupon generated.

> I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get I think that's just a misunderstanding on the stores part. A groupon is just another form of advertising (which costs money) - but businesses believe that by offering groupons they will come out ahead. I've pers…

The business typically only makes 25% of what they would have. A restaurant cannot survive on that margin.

And most Grouponers are bottom-feeders. Just looking for a deal. They're also the most likely to be vocal on Yelp (there was a study somewhere showing how Grouponers/Living Social people were more likely to leave bad reviews).

Groupon's salespeople are so high-pressure and portray an overly optimistic view of what a struggling small business should expect.

Speaking from personal interactions from several business owners who have tried daily deals here. Sure, a business needs to calculate it's ROI, but I think Groupon 1) oversells the value of 'getting their name out there' through their deals and 2) doesn't explain how bad their customers are.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#96
post #53

Earlier quoted context omitted.

> If the business owners/clients are stupid enough to give away the best experiences for cheap, it's their own damn fault for not having any business sense whatsoever. And yet Groupon is closing down operations in 7 countries and laying off 1000 people. Groupon's customers are these small businesses, for Groupon to succeed it needs to be in a symbiotic relationship with these businesses. "It's your fault for being an…

It's done great for them up to this point. How many companies wish they were in a position where they had operations in 7 countries to shut down?

Yes many companies wish they had the opportunity to burn fat stacks of VC cash. Some of those might have expanded to two countries instead, and not been forced to write off the whole thing soon after.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#97
post #41

Earlier quoted context omitted.

I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get, but I wonder how much of that was the way they treated the new customers that the groupon generated.

My experiences with Groupon mirror your own. Whenever my friends and I would show up to a business with a Groupon, we would be treated with bad attitudes, worse service and just general reluctance when the exact opposite should have been true. I mean, that is the entire point of Groupon right? To promote a business -to spread the word on the street about how great your restaurant/bowling alley/pub is. Sadly, it has b…

At Groupon merchants get paid for unredeemed vouchers (not all at once but staggered).

For the human psychology of a business owner of say a restaurant that's terribly, as this means every time someone walks in, that's $25 of revenue and say $5 of profit walking in for your business and its employees to extract, but a guy walking in with a voucher is just $20 of costs.

Even if the voucher was bought for $25, that feels like money 'earned' weeks ago, and anyone who actually makes use of the voucher feels like it's costing you $20 even though it'd constitute the same $5 profit as a normal customer.

Combine that with the fact the vouchers in this hypothetical example wouldn't actually be priced $25, but rather discounted to $15 or $19 which has to be shared with Groupon, and the fact those who're use Groupon (discount seekers) not always but on average tip less, really kills the mood for typical Groupon's merchants: struggling business owners who don't sit in an office and look at customers on a purely rational level and see them as just numbers.

So I agree, it's a human psychology flaw in the business model. It's not unsurmountable, if Groupon runs a solid Merchant Centre full of 3 minute videos for merchants on Groupon's research that shows how their service affects the success of a Groupon deal generating repeat business, how instructing your employees to say x y z words when a Groupon member comes in etc, you could go a long way to mitigating this.

Google for example runs a clever incentive structure where the quality/relevancy of the ad plays a role in your ranking vs other merchants, and so the better & more relevant your ad, the less you have to pay for your add to be more visible. This means some merchants who build relevant ads actually pay less to be on the nr 1 spot in the search ad rankings, than companies who pay more but offer shittier ads. And they run a whole merchant centre with tons of videos to explain this whole process and what you can do to improve it. [0] This improves the experience for users by rewarding merchant's quality control, which benefits them, too. Groupon should run something similar which they probably already do in some way but I'm not very familiar.

Another solution is more controversial and hard to sell to merchants, which is to not pay merchants for vouchers that go unused and expire. This way a merchant can't be 'hopeful' that a Groupon user doesn't come in, because he doesn't earn any money when a person buys a voucher and doesn't use it before it expires (like I've had happen myself a few times.) Every groupon user who comes in is one he'd otherwise not get paid for, and so it flips the story around, every time a person comes in he gets paid by redeeming the voucher. Right now he gets paid regardless and people coming in are just costs, so obviously a merchant isn't thrilled to see groupon users come in today.

[0] https://www.youtube.com/watch?v=PjOHTFRaBWA

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#98
post #87

I've never heard of this negative reaction to Groupon like you folks are describing. What was the negative side? Was it not a good advertising investment for companies? Were expectations not being set correctly by Groupon? Do they take too much of a cut? Are they just jerks to the companies? Is there room in this space to not be a shitty actor?

This was widely discussed when Groupon was hot:

http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-c...

There were also substantial concerns that the whole thing was basically a fancy, web-scale pump and dump:

http://www.thestreet.com/story/11661220/1/is-groupon-a-scam-...

In my view, the whole "daily deals" thing that they started with was always unsustainable at scale. It's one of those things that works well in small doses, but as you scale it up the value declines. However, it was novel enough and generated enough volume that it took small business owners a while to collectively realize that Groupon promotions didn't help them in the long term.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#99
post #89
post #16

I'll be honest, I know Groupon and its ilk are terrible business, but as a user of the service I've had lots of fun exploring activities and restaurants that I literally would never have bothered with or known about. In the last few weeks I've taken a Scuba lesson, a Horse Riding lesson, an intro to art class, found a couple new amazing sandwich shops. I took an amazing trip to Ireland for something like 50% off the…

Thanks for posting this comment. I think you raise what most of us should really think hard about when we see the struggles Groupon is going through. We like to throw them into a big, bulk, category and dismiss the entire thing as "bad business". But just like you pointed out, you really enjoyed it as a consumer. And I know businesses that have been running groupons for years, because they also get a lot out of it in…

> Now we have instacart, postmates, Amazon Prime Now, Peapod, and more making this model work of fast, local, delivery.

We also have smartphones now.

I was a big fan of Kozmo (and its NYC competitor UrbanFetch) but it was an entirely different kind of experience shopping on an EGA monitor with a dialup connection and I understand why it wasn't as easy to make it work.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#100
post #73
post #41

Earlier quoted context omitted.

I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get, but I wonder how much of that was the way they treated the new customers that the groupon generated.

I stopped using groupon when the hostess slipped us a different menu when she asked us if we had a groupon to use.

I've had this experience a few times and every single time it was mentioned on the Groupon, I actually checked out the menu before hand, and bought or refused the deal there and then. This isn't really unique, you buy a specific deal so you get that deal's menu, Groupon rarely sells some kind of carte blanche 20% discount card on whatever the company offers which seems to be what you were expecting.

I've also had Groupon redeem me for stuff that I had no right to in the TOS but was morally sensible to do.

There are quite a few things I criticise Groupon for but they've always been pretty transparent about their deals and willing to right any wrongs in my personal experience.

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