Nothing In The Stocking For Groupon

Oliver St. John, USA

Today This holiday season, small retailers are leaving Groupon off their lists as far as sales strategy goes.

This shopping season is the biggest one of the year, and small businesses often rely on sales made during this period to bring them into the black as the year comes to a close.

A sales strategy that didn’t work during the rest of the year is out of the question for the holidays, says Pamela Springer, CEO of online small business network Manta.

This doesn’t bode well for Groupon and other daily deals sites. Only 3percent of retailers got repeat customers out of daily deals promotions, according to a survey Manta released Oct. 30.

“They’re doubling down on things that work, and leaving things that are less proven or they’ve had experience with and didn’t work off to the side,” says Springer.

If businesses aren’t getting repeat customers out of Groupon deals, they’re losing money, says Anthony Bruce, CEO of retail data analyzer Applied Predictive Technology. Groupon often charges businesses as much as half the revenue of a deal sale, which is usually a drastic discount already.

“If there are future purchases that occur because of a Groupon, that’s great,” says Bruce. “If it’s an incremental visit I wouldn’t have gotten anyway, it’s bad. If it’s a visit I would have gotten anyway but did it with a Groupon, that’s terrible.”

Jennifer Untermeyer says she won’t use Groupon this holiday season, because she lost money on the five daily deals she ran last year for her business, Travel Kiddy, an online store that sells toys and games to keep kids busy during road trips or plane rides. She ran her first $10 deal for $20 of merchandise on Eversave last November, trying to snag holiday travelers, and ran four more similar deals on niche mom-themed deals sites, hoping to score new customers.

It didn’t work. [read more…]