Groupon, The Nuclear Bomb That Kills Retail?

 
Sept. 15, 2010 | by Bob Phibbs

It's all the rage.

Shop.org is featuring their president at their summit at the end of the month.

The first national brand campaign with GAP reportedly sold 445,000 vouchers and received $11 million in revenue.

Everyone's saying, "Come to the party the Groupons fine."

Retailers should beware. This phenomenon will deflate prices and commoditize the industry like none before.

With their "deal of the day" emailed to millions, Groupon and their imitators  are usurping your brand, your message and all for their gain.

Anyone who doesn't see this is blind.

Doubt me?

Think of the last time you received flowers.  Do you remember who gave them to you or the florist? 

Exactly, the person who gave them to you. 

The person that gives them the flowers is Groupon, you are the forgotten florist

I wrote an 11-part series on the subject with case studies. You can view the summation at http://www.retaildoc.com/blog/final-coupon-groupon-small-business/

As the holidays approach, it will be interesting to see which brand next takes the legacy of the people who built it and reduces it to a commodity or gives the impression their prices were always high and with the discount became "fair."

Retailers participating in such online coupon programs are fueling a coupon-driven, price-obsessed, dirt-scratcher mentality that will be unsustainable for all.

When the profits are freely given away in some misguided "trial" mindset, the brand won't falter immediately but make no mistake, it will falter.  

Its as much an admission of defeat, "we have nothing else to offer" to the customer.


Topics: Customer Experience , Marketing , Retail - General


Bob Phibbs / Bob Phibbs, the Retail Doctor, is a popular motivational speaker and small business Consultant who has transformed thousands of businesses throughout the world with his straightforward, proven advice. His success at making over businesses has been featured on PBS Life & Times, in the Los Angeles Times, Entrepreneur magazine, and the New York Times.
www View Bob Phibbs's profile on LinkedIn

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