Ian Percy

Small Merchants 'Bah Humbug' Daily Deals

November 29, 2012

FROM RETAILWIRE:
A RetailWire story back in July of 2011 looked at plans by consumers to use daily deal offers to save money on their holiday purchases. Now comes a report that small retailers have decided to take a pass on offering Groupons this holiday season. Is there a place in the daily deal space for special offers that satisfy customers while making business sense for merchants?      [more...]

I've lost count of the horror stories about Groupon and the like. It's not even about no return on investment, it's about significant loses ON TOP OF your "investment." It was our own Bob Phibbs who best explained the sheer stupidity of this strategy to me. When you lose money selling one item at a huge discount, what exactly makes selling a thousand of them seem like a good deal?

From the customer's perspective these discount programs are a gift-horse. From the retailer's perspective it's a self-inflicted scam.

Now, it might work if the discount was a reasonable 10-25%...but then who would bother with that? These days it's 80% off or nothing!

Demeaning your product or service will never generate loyalty.