Chicago-based Groupon (GRPN-$5.01)
remains a coupon-driven business, just one of many available to online
shoppers. Further, a growing number of analytical and survey-based
studies report
disillusionment with the alleged effectiveness of coupon promotions. In
particular, merchants are questioning the long-term profitability of daily
coupon ventures, as a low percentage of customers spend beyond the deal value
(with even fewer returning for full-price purchases). Evidence
is surfacing, too, that shoppers drive up store congestion by
waiting until expiry to use their coupons, which negatively affects perceptions
of the participating vendors.
Groupon
management says that it is addressing such concerns and is working more closely
with its merchants to (a) improve profitability (such as, its new mobile
payment app, called “Payments,” which will offer more competitive swipe-fees
than the 2% - 4% transaction costs associated with traditional charge cards)
and (b) design online promotional offerings that increase percentage of coupon
redeemers into loyal customers.
No comments:
Post a Comment