![]() ![]() The platform is also vulnerable to changes in the economic cycle, he said. Merchants are unhappy when dealing with the negative impact of a low-quality customer base, he said. How Retailers Can Use Convenience to Attract ConsumersĬustomers become unhappy when a Groupon service is so popular that suddenly they can’t get an appointment, he said. Some of the small-business owners that used the platform found themselves overwhelmed operationally when a deluge of customers took up the coupon offer. For merchants, the downside became apparent when the service mostly attracted bargain hunters, who were unwilling to spend more than the face value of the coupons. As long as enough people wanted the same thing, Groupon could help them get a good price. Read: CEO sees coupon-free Groupon+ offers morphing into modern-day loyalty programįor consumers, the draw was the perceived benefit of group buying. Groupon makes money by taking a commission from the discounted price. That business involves signing up merchants that are willing to offer sometimes deep discounts on goods and services aimed at local consumers in the hope they can upsell them other services to make up the price shortfall. Groupon’s business model has been the subject of critical academic research, ever since the company first started its daily deal coupon business back in 2008, offering everything from spa and beauty treatments to restaurant deals. Read now: Why Mila Kunis uses Groupon and calls herself ‘a really great promo-coder Clipping coupons Would make a value-creating combination and that IACĬan be a trusted steward to manage,” the analyst wrote in a note to clients, reiterating his neutral rating on the stock. “We see the 4Q results (and the exit of Goods) as increasing the likelihood of a takeout/merger (which we’ve written about previously), with our view that Groupon and Yelp Wedbush analyst Ygal Arounian said the decision to exit Goods was the right one and would remove a significant drag on value. The news came as it reported a 23% decline in quarterly revenue, named Melissa Thomas as new chief financial officer, and said it plans to pursue a reverse-stock split to boost the price of its stock. ![]()
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