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40% of Groupon merchants say "never again"

marketingpilgrim.com

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Re: 40% of Groupon merchants say "never again"

#31

Post by marksbren »

garply wrote: post #10

I'm a physical goods retailer and I'd like to point out a bit of group-think on HN's part. 3 months ago, I asked you guys if I should use a Groupon clone ( http://news.ycombinator.com/item?id=1490096 ) and I got overwhelmingly positive responses (someone even called my concerns paranoid). Now the place is littered with negative attitudes toward Groupon. I don't think the facts underpinning my worries have changed, on…

I tend to agree here, although I don't think it is limited to the HN community. This article could have easily had the headline, "60% of Groupon merchants would do it again". I think that would have been the headline a few months ago.

Re: 40% of Groupon merchants say "never again"

#32

Post by garply »

pvg wrote: post #20
garply wrote: post #10

I'm a physical goods retailer and I'd like to point out a bit of group-think on HN's part. 3 months ago, I asked you guys if I should use a Groupon clone ( http://news.ycombinator.com/item?id=1490096 ) and I got overwhelmingly positive responses (someone even called my concerns paranoid). Now the place is littered with negative attitudes toward Groupon. I don't think the facts underpinning my worries have changed, on…

There's plenty of hive-mindish stuff on HN but I wouldn't call the response to your original post 'overwhelmingly' anything - you got about 7 responses and those responses barely got a couple of upvotes between them. Statistically, nobody on HN read your post. I don't have it handy now but on the recent thread about the Portland coffeeshop owner, most posters seemed to feel it was the proprietor's mistake rather than…

You're right, I didn't get a ton of responses. Still, the responses I did get were overwhelmingly pro-Groupon. As someone seeking an answer to an important question, my takeaway was "Hm, HN thinks it's a good idea."

Honestly, I'm still on the fence. I've said this elsewhere, but I'm in China and the Groupon clone market here is really saturated and interesting to watch. Basically, the Chinese clone market really resembled the American market for a while (w/ a winner, Meituan, pulling ahead), but then just about every site with a large email list or userbase joined the fray. Even my local expat magazine is running a Groupon clone. The original players are now getting clobbered by RenRen (a Chinese Facebook) and Dianping (the Chinese Yelp). I can tell because I know a Groupon clone owner who's basically dropped out of the contest and because the other clone salespeople (including Meituan's) have become increasingly desperate and have offered me increasingly better terms.

I'm currently leaning towards using some of them, because I believe I've gotten some of them to the point where I can have the Groupon require customers to buy from my website, which gives me customer information that I really want.

Customer data aside, I still think these sites are causing the equivalent of a price war in the industries they're targeting. During some periods when a competitor is being featured, it almost seems like it's directly hurting my volume. I guess it could be coincidence though.

Re: 40% of Groupon merchants say "never again"

#33

Post by jakarta »

It's interesting to think about ways in which using Groupon would be beneficial.

Maybe for a new entrant to a geographic market where they are willing to settle with much lower margins? So you would in that case use Groupon to get your initial customers at the expense of neighboring competitors. And by keeping prices permanently low you would potentially keep those customers.

Presumably, if you can keep that up and competitors cannot compete, you could drive them out of business and then raise prices. Sort of a Walmart 2.0 strategy.

Re: 40% of Groupon merchants say "never again"

#34

Post by singer »

AlexMuir wrote: post #23
ig1 wrote: post #21

Earlier quoted context omitted.

I disagree, if someone likes a restaurant then they're likely to come back even if they can get a cheaper meal elsewhere, price isn't the primary factor most people use in choosing a restaurant.

Partly - but people who like trying new restaurants are going to keep trying new ones. Not stop because they found somewhere they like. They might like the next place even more - and at half the price I'm sure they will.

"Not stop because they found somewhere they like"

I bet the average person would go back and/or recommend the restaurant to friends if they had a good experience though.

Re: 40% of Groupon merchants say "never again"

#35

Post by stanleydrew »

marknutter wrote: post #26
garply wrote: post #10

I'm a physical goods retailer and I'd like to point out a bit of group-think on HN's part. 3 months ago, I asked you guys if I should use a Groupon clone ( http://news.ycombinator.com/item?id=1490096 ) and I got overwhelmingly positive responses (someone even called my concerns paranoid). Now the place is littered with negative attitudes toward Groupon. I don't think the facts underpinning my worries have changed, on…

HN likes to turn against companies that become too successful - FB, Groupon, etc. I assume it has a little bit to do with sour grapes and a little bit to do with not wanting monopolies forming.

HN likes Apple and Google a fair bit. I'd say HN turns against companies that turn against their users/customers.

Re: 40% of Groupon merchants say "never again"

#36

Post by garply »

singer wrote: post #12
garply wrote: post #6

Earlier quoted context omitted.

Groupon takes a far larger cut than the local newspaper would.

I doubt newspapers take a cut at all. They charge a fee to post an ad. Regardless, this article is describing the aftermath of Groupon coupons.

I meant as a percentage of the profit I would be making from the ad.

Re: 40% of Groupon merchants say "never again"

#37

Post by steveklabnik »

singer wrote: post #34
AlexMuir wrote: post #23

Earlier quoted context omitted.

Partly - but people who like trying new restaurants are going to keep trying new ones. Not stop because they found somewhere they like. They might like the next place even more - and at half the price I'm sure they will.

"Not stop because they found somewhere they like" I bet the average person would go back and/or recommend the restaurant to friends if they had a good experience though.

This article would seem to indicate that that's not really the case.

Re: 40% of Groupon merchants say "never again"

#38

Post by notahacker »

marknutter wrote: post #26
garply wrote: post #10

I'm a physical goods retailer and I'd like to point out a bit of group-think on HN's part. 3 months ago, I asked you guys if I should use a Groupon clone ( http://news.ycombinator.com/item?id=1490096 ) and I got overwhelmingly positive responses (someone even called my concerns paranoid). Now the place is littered with negative attitudes toward Groupon. I don't think the facts underpinning my worries have changed, on…

HN likes to turn against companies that become too successful - FB, Groupon, etc. I assume it has a little bit to do with sour grapes and a little bit to do with not wanting monopolies forming.

There's also a concern about how monopolists might use their monopolies - 50% commissions aren't a positive sign.

If there's any sour grapes its a dislike of companies gaining traction through aggressive viral marketing rather than novelty, usefulness or technical proficiency. I don't see too much ill-feeling towards Google, Amazon or Skype, for instance.

Re: 40% of Groupon merchants say "never again"

#39

Post by sedachv »

garply wrote: post #32
pvg wrote: post #20

Earlier quoted context omitted.

There's plenty of hive-mindish stuff on HN but I wouldn't call the response to your original post 'overwhelmingly' anything - you got about 7 responses and those responses barely got a couple of upvotes between them. Statistically, nobody on HN read your post. I don't have it handy now but on the recent thread about the Portland coffeeshop owner, most posters seemed to feel it was the proprietor's mistake rather than…

You're right, I didn't get a ton of responses. Still, the responses I did get were overwhelmingly pro-Groupon. As someone seeking an answer to an important question, my takeaway was "Hm, HN thinks it's a good idea." Honestly, I'm still on the fence. I've said this elsewhere, but I'm in China and the Groupon clone market here is really saturated and interesting to watch. Basically, the Chinese clone market really rese…

Just wanted to say that posts like this are the reason I read HN. More insight into Chinese ecommerce ftw.

Re: 40% of Groupon merchants say "never again"

#40

Post by jasonlotito »

The numbers in this article, and in the WSJ article aren't very clear.

40% of the merchants say they wouldn't do it again. 66% said they were profitable. This means some of these profitable merchants would not do it again. 32% said they were not profitable. We don't now how many of these would not do it again.

Of course, their is no information regarding the actual businesses themselves. A suffering business using GroupOn probably has a good chance of suffering afterwards. Advertising, whether through radio, GroupOn, or other sources, isn't a magic bullet.

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