Groupon Revealed: The Pros and Cons of Daily Deals

GROUPON REVEALED: THE PROS & CONS" DAILY DEALS PROS CONS Inexpensive Deals This is the most appealing feature of daily deal websites. Most sites now offer inexpensive or free shipping, making that deal all the more sweeter. Lack of Customer Service On most daily deal sites customer service tends to be of little importance. Ability to Profit 50% or Bust Entrepreneurial-minded individuals willing to invest in the advertised deals, can often resale the merchandise at a profit. For merchants there is a minimum deal amount in order to participate in the site. Usually you must be willing to offer a service at, at least 50% off. Social Connectivity Many of these sites have forums where fellow consumers can meet and exchange recommendations and criticisms. No Refunds For most sites, there are no refunds or exchanges. If there is a problem, with a product the consumer must go through the manufacturer rather than the merchant. GROUPON.COM LIVINGSOCIAL.COM PROS CONS PROS CONS O Bulk Bargains Coupons offered in bulk mean larger discounts for everyone. The time period to enter into these deals is much longer than other sites, on average 3-4 days. Minimum Discount Merchants must be willing to offer at least 50% their services or they can not post to Groupon. What Groupon? There have been reports of merchants not honoring/being aware of coupons being offered. Social Connection Living social is now joining the ranks of the social network giant Facebook. Freebie After 3 friend referrals a customer receives a free deal. O Hello? Customer Service? Customer service is slow to respond to inquiries and often difficult to contact. BUYWITHME.COM WOOT.COM PROS CONS PROS CONS O Bulk Bargains When a friend is referred to the site the consumer receives a $10 incentive. No Refund All transactions are final. No refunds. No questions, and a government ID must be shown when redeeming a coupon. O Cheap Tech Woot offers one product at a deep discount in a 24 hour span. Minimum Discount Most of the items are refurbished and when there is a defect or issue the consumer must contact the manufacturer. O No Refunds Save on Shipping Woot offers a flat $5 shipping rate on all purchases. THE MOST POPULAR DAILY DEAL SITES GROUPON WOOT OTHER LIVINGSOCIAL BUYWITHME EVERSAVE TIPPR UNIQUE VISITORS TRAFFIC SHARE Over the course of one year, the number of unique visitors to Daily Deal sites has increased by over 600% According to Experian, this is the breakdown of the daily deal market. 8 MILLION 8,278,460 3% 4% 7% 6,926,063 16% * 6 MILLION DAILY DEAL TRAFFIC 43% 4,853,728 4 MILLION 2,249,324 503,538 27% FEB 2010 MAR 2010 APR 2010 MAY 2010 JUN 2010 OCT 2009 JAN 2010 GROWTH AVERAGE DEAL PRICE Unique visitor growth from 2009-2010 $41 $41 $35 740.64 623.31 489.8 8.47 GROUPON LIVINGSOCIAL BUYWITHME WOOT GROUPON LIVINGSOCIAL BUYWITHME Sources: WSI, Sitejabber.com, Compete.com, Businessinsider.com, "Groupon: Another Market Success" Robert Murphy, Yipit, Groupon.com, LivingSocial.com, Buywithme.com, Woot.com NUMBER OF UNIQUE VISITORS AUG 2009 SEPT 2009 NOV 2009 DEC 2009 JUL 2010 AUG 2010