Groupon Business Analysis

Although Groupon and Living Social are sites where consumers can shop for a bargain for products, services, and bundled traveling deals, there are only some businesses that find true success with the social commerce strategy. In regards to Groupon, The Journal of Interactive Advertising reported that Groupon’s revenue increased from a mere 30 million dollars in 2009 to a whopping 700 million dollars the following year; yet with the perceived success of the company, businesses had experienced high volume struggled with consumer loyalty and providing the best customer service (Pentina & Taylor, 2013, p. 67). As a result, the company recorded that only 42 percent of consumers return for a second shopping experience (2013, p. 67). When something
occurs too frequently, it loses it luster and value. In addition when something becomes to frequent it retards the urgency consumers once had. For instance, from my personal experience with Groupon as a consumer, the company literally sends repeated discounts off of daily deals and plant seeds of adventure in my head that I had never even thought of. Presuming the role of a marketer, Groupon would definitely not be a primary go to option. I would use the social commerce on a needs basis. For example, if I was a marketing manager in the retail industry I would use Groupon to clear up inventory, or use the tool to introduce new clothing items as a way to track consumer acceptance to the item. As a marketer, one alarming statistic that stands out is the fact that merchants only end up truly profiting 25 percent of finals sales with Groupon (Lyons, 2010, p.25). Although Groupon would serve a dual purpose since it is advertising my business while selling products, it would definitely be used scarcely. In conclusion, using Groupon regularly would not be financially sound, however if it is used occasionally it would be less anxiety for the consumer and the merchant.