When I first found out about Groupon around one year ago, I was ecstatic. I am one of those people who love bargains and discounts, and are easily tempted by huge discounts such as those offered by Groupon. Needless to say, you can imagine how big of a Groupon fan I am!
Correction: how big of a Groupon fan I used to be…
I used to be one of those people who would get extremely excited every night when the clock was about to hit midnight because that is when Groupon posts their new daily deal everyday. I would literally wait in front of my computer, click “Refresh” on my browser repeatedly at 11:59pm until the new daily deal comes out. Then, I would get all excited about the new deal and start calculating in my head about whether I should purchase it.
Now, I don’t check as often, and even Groupon’s daily emails sent to my inbox are starting to get a little annoying.
- The variety in the type of clients they seem has taken a plunge (it’s always deals for fitness centers, salons, spas, and photography packages now)
- There is an overwhelming number of daily deals instead of one daily deal to look forward to — seems to be an attempt to maximize profits
- The quality of businesses featured is also going down (remote locations or reputation-questionable)
- The quality of the products or services provided has also shown a decline because some businesses are unable to handle the large volume of customers attracted through the deep discounts
In addition to these reasons which I can personally relate to, I also read an interesting article pointing out other reasons why “Investing in Groupon May Be a Bum Deal” after all:
- Business model is not unique, easy to copy and not being improved
- Competition in this industry is rapidly growing (low barriers to entry)
- Personalization of deals is lacking, while other businesses are doing everything they can to fulfill the “individualization” that consumers demand
Groupon is becoming junk food because as their quantity increases, their quality unfortunately seems to be going in the opposite direction.
Groupon: Good or Bad for Business?
