October 22, 2010
Groupon is bad for consumers
I am not making this stuff up. Monopolies generally keep prices high and extort consumers. While Groupon is not a monopoly, they are the big boys in daily deal and are able to use their weight to lock up merchants and control pricing. Here is a specific example.
Tippr ran a deal for Weekly Cinema as they were getting into the market which offered customers 4 movie tickets for $20. $5 per ticket. See it here in seattle. After this became one of our most successful deals, Groupon took notice and called Weekly Cinema offering them an exclusive long term relationship. Now of course the conspiracy gremlin in my head is telling me Groupon is doing that to kill Tippr and deny competition any meaningful revenue. There is some of that I am sure, but lets look at what happened to consumers.
Consumers lost out. Groupon now has 6 tickets for $38 in NYC. By my math that is $6.33 per ticket. That is a bad deal. Groupon costs consumers money an limits merchant’s ability to market their business.
Posted by Martin at October 22, 2010 9:00 AM
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Question is - why did Weekly Cinema sign an exclusive? Did Groupon offer a minimum # of customers? A less than 50% cut? I'd be very curious to know.
Posted by: Sol Orwell at October 22, 2010 1:26 PM
The key in this ever-changing environment is "Social", and when I say social, I mean "Reputation Management". Tie this to consumers all striving for one thing... opportunities to sell, and lots of them. There are many pieces of this awesome puzzle; one big one being market strategy. a) go for the larger deals by signing corporations or b) win market share one small business at a time. Another piece of this, is acknowledging and addressing both the business owners hurts and the consumer's hurts and then fixing or solving them. Tippr is on the path of taking business online and social to a whole new level.
Posted by: Keith Fleming at November 11, 2010 7:18 PM
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