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Morning Poll: Groupon Deals

by ARLnow.com November 9, 2011 at 10:47 am 3,210 22 Comments

Groupon built its business on offering hot deals at local shops and restaurants.

Those blockbuster deals would attract thousands of buyers and help spread the word about Groupon. But are the deals cooling off?

Groupon held its initial public stock offering on Friday, and since then the stock price has steadily fallen from a high of $31 to $23.50, as of this morning. Analysts have questioned whether Groupon can live up to its multi-billion dollar valuation with reports that local merchants — especially restaurants — are souring on the big daily deal model, which is often a money-loser thanks to Groupon taking up to half of the proceeds from already-discounted sales.

Consumers, too, may be getting turned off, especially in Groupon’s better-established markets. Data suggests that a “significant portion” of people who once subscribed to daily deal emails are now unsubscribing. Indeed, one firm that tracks data from Groupon has reported that its core local deal business is starting to decline.

Some anecdotal evidence points to an erosion in the quality of deals offered as the more popular local businesses become less likely to do steeply-discounted deals and as an explosion in the number of daily deal companies spreads the better deals across a wider swath of websites.

Recent offerings from the Groupon Northern Virginia Twitter feed include 63 percent off weight-loss hot pants, 53 percent off a haircut at a Dulles, Va. salon, and 58 percent off an eco-friendly waterless car wash.

Do you think the quality of Groupon deals has gone down over the past year or so?

  • novasteve

    Maybe I don’t understand economics or business, but how much money can you make selling $1 for 50 cents?

    • TGEoA

      It’s advertising to get fannies in the seats.

    • susie

      it’s actually only 25cents per $1. groupon takes 50% of the profits, so if a business offers the product at a 50% sale, they are actually only getting 25% of the original price.

  • South Arlington

    If anything, Living Social is eating Groupon’s lunch.

    • Michelle

      I agree. I have purchased LivingSocials more than Groupon. Groupon just doesn’t try anymore. I don’t know how many $10/for $20 discounts for Indian food at a bobo restaurant people care to buy.

  • KARLington

    They’ve become offers for late-night infomercial-type things. Unsubscribed.

  • Scott

    Option 4: never used them, don’t plan to.

    • JamesE

      That’s my vote.

  • Katie

    Only business that have problems use Groupon now. I check Yelp everytime I see one that might interest me only to read horror stories and decide not to waste my money – even if I am saving some.

  • tonytenor1

    The poll is missing a key element. There are so many MORE groupon deals. This issue leads to people seeing a large number of deals that don’t appeal to them. The perception that there are more “bad deals” leads to someone who hasn’t bought something in 200 tries (less than 5 months worth of deals emailed to you by groupon) unsubscribing. There are still just as many great deals to be had. They sell out very quickly, and are outnumbered by deals that linger too long. Simple solution is to only allow deals to be up for 24 hrs. max.

  • Tabby

    I’ve just thrown money down the drain on things I could never find the time to do.

    • Michelle

      That is how Groupon (and other deal sites) get you. You impulse buy. Purchase only to places you normally would frequent or to places/things you have planned out. Don’t impulse on that random crappy restaurant to save $10. Not worth it.

  • Abe Froman

    I am definetly seeing fewer deals on all those deal sites that I want any part of.

    House cleaning, carpet cleaning and most other services which require am appointment are just a complete loss. Lately prices aren’t much of a deal for the consumer, because the provider has to split the sale with groupon, living social, etc. Second, its gotten so hard to actually schedule the service that its just not worth it. Lately they have had too many useless services too. Chimney sweep, dryer vent cleaning, @ your home car wash are all not big winners.

    Golf, almost a complete waste with all the restrictions and then when you can use the deal, its not really an even remotely desirable time and the place is jammed with people who don’t know the game and slow down the pace, like at Raspberry Falls a couple weeks ago, it took 5:30 to play a round of golf, should been an hour less. They blamed all the groupon using rookie golfers.

    Eateries and retail establishments aren’t too bad of a deal if its a place I want to go or try.

  • NoVapologist

    Groupon is the Pets.com of this decade — a lot of bells and whistles over a business model that won’t survive. The company lost $100mn last quarter; it owes more money to its vendors than it has assets. Not a problem if it were still growing fast and bringing in new cash hand over fist as it did in its early existence – but it isn’t. Growth is way way down as businesses are learning that this whole coupon thing only leads to losing money on one-time customers looking for deals – not repeat customers willing to pay full price after having a discounted introduction. Groupon is likely to be in bankruptcy within a couple of years.

  • chipotle_addict

    The problem is that they offer nothing but an idea, and ideas can’t be protected by patents. Dozens of similar deal sites are out now, and there is not a single reason to stick with groupon over the alternatives.

  • FunnyMunny

    The one Groupon I purchased was listed as $30 worth of merchandise for $15. So this said to me that I had $30 worth of credit at unnamed store. Turns out that it could only be used on the regular price, so in essence I had bought a coupon that got me the same price as I could have had just using a regular code. Unsubscribed, done!

  • Chipper J.

    LivingSocial is winning this game. They have better deals at higher quality merchants. The idea is to get people in the door and gain residual business. Groupon has become the “Walmart” of Daily Deal Sites, whereas LivingSocial focuses more on quality, and the experiences and deal offers themselves… I see LivingSocial becoming the leader in this industry at some point.

  • Michael H.

    There’s too much competition in this new “market”. Living Social looks to be a strong competitor, especially now that they are partnering with Amazon.com. That gets them much broader exposure and access than GroupOn can get on its own.

    There are also specialty companies that offer targeted deals to their subscribers, including employees of particular companies and specific product categories like sporting equipment and race fees.

  • GreaterClarendon

    Used to be that your Groupon at local restaurants included alcohol, and now that it no longer provides for alcohol, it’s kind of hard for one person to eat $25 worth of food – so definitely phasing out my Groupon purchases to places I already go regularly.

  • Michelle

    To be fair, groupon (and other deal sites) has worked out a few times in favor of the business.

    I purchased a groupon for a tanning salon I had never been to and after my groupon was over, I continued to tan there throughout the summer instead of my normal tanning place. I also bought a livingsocial for a bootcamp for $30/month. I have since signed up at the regular price at $99/month. Also found a new salon. Sometimes it works out for the business so it’s not all that bad.

    I do agree with others when they say it’s difficult to make an appointment when there are 1,000000 people who bought the deal. That being said, I avoid those deals. Living Social has a great refund policy on their travel plans so +1 for them. If you can’t book it, they refund you money. Works for me!

  • Brittany

    I use this site http://www.yipit.com to find deals. if i like, i will sign up and buy. this site compiles all the deals and you can filter on just restaurants deals, for instance. pretty cool site!

  • Carol_R

    I expect Groupon to file bankrupcy in 1 year. These Daily Deal sites have to pay people $5 – $10 to sign up for the 1st deal. It’s stupid to do more than 1 deal. Just do 1 deal & unsubscribe then get a $5 to $10 discount at another Deal site.

    Businesses aren’t getting new permanent customers from Groupon and they lose money on every deal.

    Groupon hasn’t made a profit yet and is losing millions each day.

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