Straight up – I think that Groupon is awesome, for all parties involved. The consumer gets the deal and the vendor gets huge exposure to a new customer base and can clear inventory, whether that is product or time (available spa time, for example) and Groupon makes a ton of cash. Of course, the merchant may not make money on the specific deal unless they up-sell which many of them can. For example, I bought a $50 coupon for $100 worth of sushi groove and spent $130 including drinks. Whether or not the deal provides profit for that merchant transaction, Groupon is really a marketing play not a short term merchant profit play. They allow merchants to drive awareness and product demand really fast.
Here are 3 simple examples how they can improve the service for both the vendor and the consumer (I have a dozen in mind but no one will read more than three examples).
1. Enable vendors to offer community with a few simple clicks – let customers talk to each other and build an experience.
Not all of the vendors that use the Groupon service would benefit from offering a customer community but some will. My idea is to give the vendor the option of allowing each consumer (and maybe even prospective consumers) the ability to communicate with each other. This will allow the vendor to up-sell and cross-sell and may even allow the conversion of lookers to buyers, during the deal consideration process. Now, this may not be relevant for a sushi restaurant but may be relevant for a bar. One merchant who could definitely benefit from this capability is Ready, Set, Bag!, Oren Jacob (also the CTO of Pixar) for the launch of his documentary. Oren used Groupon to pre-sell nearly 300 tickets to his upcoming documentary premier. Wouldn’t it be cool to connect with other movie goers in advance of the documentary film – or at least have that option. Perhaps they could do this with a Plancast API, or simply build it in to their infrastructure, like Plancast, and offer it to the merchant.
2. Offer a white labeled service to allow the customers a follow on capability.
This is a layup, right? Shouldn’t the vendor have the ability to offer their own group buying offers, as a follow on service. This might be an upgrade or perhaps Groupon provides the full services and takes a piece of the transaction volume that cranks through the system – simple to offer and easy to understand. Currently, Groupon has a waiting list of 3,500 merchants. This “wait list” is one of the holes that allows copy-cats to build traction. They could close this gap by providing this follow-on capability. For example, Dan Yoo of Stone Korean Kitchen sold 2,300 Groupons recently. He would love additional tools to most effectively leverage this transaction and customer base while providing customers with a deeper experience. These tools might include analytics and follow-on deal capability.
3. Provide extra value to the consumer who really spreads the word fast and frequently.
If my network (say first, second and third degree relationships) sign up for the deal, then I should receive Groupon credit of an extra discount or some of form of gift. It’s easy to track, etc. LivingSocial does some of this in that if 3 people that I share my deal with buy it, then I get it for free. Both LivingSocial and Groupon can enhance this service and make it more valuable for me, as a consumer, to spread the idea.
For more about Groupon and the take by TechCrunch, have a look at this. What do you think? Simple, right?