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Livernois 1 0. Arxegoz Beauty 7 0. Pinellas Park, Florida 0. No Escape Room 3 0. Nonetheless, new local white-label-deals sites have entered the market. Methodology: This study is based on a cross-sectional design. Data were collected through two surveys conducted in the Italian context: the first among Italian merchants that had used Groupon; the second among merchants that sold their coupons through Kauppa, a local daily-deals site operating in six Italian provinces. Is Groupon a Group Con? As the saying goes, if it sounds too good to be true, it probably is.
The consumer and the company itself seem to come out on top, but what about the merchant? What sounds like an amazing deal What sounds like an amazing deal appears on closer examination to be harmful to the businesses that advertise it both financially and in terms of bringing in new customers. At a glance, Groupon might look like an excellent opportunity for a small business.
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Groupon may appear to take on a lot of the risk because the merchant is not responsible for the marketing and does not even have to shell out any money at first. Instead, Groupon pays the merchant after the offer has run.
The consumer gets a crack at a half-price restaurant meal or other goods or services, and the merchant gets a great chance to bring new people into the business. This almost sounds like a good deal for everyone except Groupon. However, the numbers tell a very different story. Still, as yet another saying goes, you have to spend money to make money. If Groupon results in a significant uptick in customers, then the initial loss should pay for itself and then some.
In fact, online ratings after a merchant runs a Groupon deal have been shown to actually skew more negatively. All the same, poor reviews and a significant hit at cash flow can still be justified if the customer numbers rise, yet here Groupon promotions also appear to be failures.