In North America, where the daily-deals business is now shrinking, the reasons have to do with a longer-term trend Groupon is unlikely to stop. The group-buying fad has passed. A core market of bargain hunters will keep going for Groupon deals, but Groupon is likely to face the kind of slow bleed that eBay saw in its online-auction business.
In the same way that those weekly circulars and ‘value pack’ coupon envelopes in the mail have come to be merely a straight-to-trash annoyance by most folks, these daily deal sites have quickly became the online equivalent.
The reasoning? Because we’re fucking tired of them. Especially when most offers are for products, services, establishments that we can frankly not give two shits about and probably suck anyways. Why else would a business run a Groupon that lops off 75% of their gross income anyways? Successful places don’t need to embark in this type of exorbitant loss leader.
Now, when offers like this were scarce (you know, when daily deal sites only had one fucking daily deal), people were willing to take a chance on the unknown. But with all these players in the space nationally as well as hyperlocal versions of the same model, consumers now have an abundance of choice and it’s not as urgently enticing to jump on a deal like they’re getting a steal. Tragedy of the commons rears its ugly head in yet another industry.
On top of that, there’s just not enough inventory to go around. Can someone tell Groupon that I don’t want a fucking manicure, horseback riding lessons or a shitty custom bobblehead doll? When I’m opening their app less and less and I’m more surprised when there actually is a deal that comes anywhere close to of interest to me, the writing is on the wall.
You’d have to be a lunatic now if you still don’t think Andrew Mason and friends should have taken that $6 billion from Google two years ago.
A decade ago, eBay auctions were a cultural phenomenon, with many consumers drawn by the thrill of winning an auction. In time, the allure of that challenge passed, prompting eBay to adopt a fixed-price model. Some eBay users still love auctions, but that business has become more of a niche for eBay. Just as the group-discount business will become for Groupon, LivingSocial, and others, as online consumers move onto the next buying fad.
The value proposition is in the product you sell, not the method of payment.
Now can someone tell me where I can get a horse manicurist bobblehead made?