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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

#41

Post by hnal943 »

bane wrote: 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…

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.

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

#42

Post by k__ »

The deals I saw, felt rather crazy to me.

A friend of mine paid 100€ for 100 pizzas, one every day. Also 100€ for 100 pasta dishes.

The idea seemed to be, that the service could plan ahead, because he knew months before how much ingredients to buy.

The delivery service who offered this deals closed down after a month, so in the end every meal did cost my friend about ~3€, which isn't bad.

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

#43

Post by whistlerbrk »

kardos wrote: post #2

Looks like businesses have collectively realised that groupon is a miserable deal and it's finally caught up with them, after having been running on fumes [1] for a couple years now. [1] http://blog.bodellconsulting.com/2013/03/01/groupon-a-bad-de...

Business owners really ought to know what their margins are. I feel bad for the ones who got pressured into bad deals, but they have to know what their literal bottom line is.

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

#44

Post by Someone1234 »

kardos wrote: post #21
devit wrote: post #14

Earlier quoted context omitted.

Isn't this kind of thing beneficial if run with more reasonable margins and a subscription model for customers? Basically, the customer subscribes to the service and gets discounted meals at the cost of not being able to choose the restaurant himself. Restaurants can use the service whenever they expect to have empty tables, allowing to still profit for them, but with a reduced profit margin. I'm not sure if it works…

> Restaurants can use the service whenever they expect to have empty tables, allowing to still profit for them, but with a reduced profit margin. Businesses receive 20-25% of retail price when they take a groupon deal, so you'd need a profit margin >75% to even entertain that idea. Also it cannibalises some of your existing customers, converting your 75%+ profit margin customers into near zero or loss customers. I'd…

Playing devil's advocate here...

You do have to consider the advertising in the calculation. If they spend $2K/year on advertising now, and a GroupOn sale might be viewed by 10K/people and purchased by 100-150, then still might come out ahead even with $0 or -$10/head ($1500 in loss for the GroupOn).

If a place is doing a GroupOn it is unlikely a zero revenue person will displace a paying person, since the place would have to be almost at capacity for that to make sense (and if they're that popular, why are they doing a GroupOn?).

But then the real question is: "How effective of an advertising platform is GroupOn?" And that I do not know.

PS - Anecdotally I have read that the "type" of customer GroupOn attracts might hurt it further (people claim they're very demanding, hard to please, and unlikely to return). But anecdotes and anecdotes, have to take them with a pinch of salt.

PPS - I myself wouldn't do a GroupOn because I would feel like it was de-valuing the establishment. It sets the new "normal" to the discounted price.

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

#45

Post by pagkag »

rhino369 wrote: post #18
seiji wrote: post #8

Earlier quoted context omitted.

Groupon was a deliberately calculated scam once it started getting huge investment though. Investors are always willing to burn the long term (the public) if they can pop the short term (themselves).

If it was a scam they would have cashed out at the top.

They did. http://mashable.com/2011/06/02/groupon-cash-out/#HpVZ6M6bZqk...

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

#47

Post by tootie »

waterside81 wrote: post #37
therealmarv wrote: post #34

1,100 ? On what did they all work?

Outbound sales I'd imagine. It takes a lot of people to make calls to businesses to convince them to sign up for Groupon, how to structure their deals etc.

Wasn't that a scene in Silicon Valley? Their competitor had like 3 developers and 100 salesmen.

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

#48

Post by eloisant »

mikepurvis wrote: post #40
josefresco wrote: post #19

Earlier quoted context omitted.

Lots of things might be great for consumers, but for businesses it just doesn't make sense. Besides what I've read, I've heard from business owners/clients who try "group" discount services, but walk away feeling that it did little to help their customer growth long term. Would you be willing to pay more for those same experiences?

It always seemed strange to me that the coupons were essentially "get a $30 gift card for $15, to use whenever", when it seems like a lot of the deals could actually be good for both parties if structured more rigidly. For example, selling a $5 cinema pass for a specific day, time, and show. So they book the whole screening room, sell exactly as many passes as there are seats, pack the house, and hand you your popcor…

I think a lot of the hype and interest generated by Groupon is that they were very good deals for the consumers.

If they were just regular coupons, consumers would simply dismiss it with a "meh" and forget about Groupon.

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

#49

Post by ThomPete »

bane wrote: 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…

You express what I consider an understandable but problematic sentiment.

The idea of the customer is always right somehow transformed into the fallacy of what is good for the consumer is good for the company.

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

#50

Post by bbarn »

hcrisp wrote: post #10

Will Groupon founder Brad Keywell's newer venture, Uptake, face a similar outcome? A recent Forbes article suggests he's better at starting a company than running it.

Chicago dev here. Lots of friends in the groupon circle I know have been unhappy and left. Know two people at uptake, both miserable there. They seem to have a big problem with claiming/trying to be a great place to work, but executing poorly.
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