Potential Risks for Groupon

One of Groupon’s greatest weaknesses lies in the local retailers with whom the well-known daily deals website makes partnerships. They provide the goods and the services distributed by Groupon which plays the role of intermediary earning half of the revenues made on the sale. However, it is the only one held responsible by customers when the deal fails to satisfy them.

First of all, the typical client for this type of websites is the disposable one. Looking for the best deals, they are the free electrons of the market, constantly moving and switching between manufacturers and distributors so as to obtain the best price-quality relationship. Their loyalty cannot be trusted and they can be retained only by permanently providing them with the best offers on the market.

Another aspect coming from the retailers’ part contributes to the general background. Although price is the major factor to lead to their purchase decision, it is not the only one. There are several ways go satisfy as well as to disappoint them. Thus, they might give up the habit of purchasing Groupon deals if they have previously been in one of the situations:

  • Groupon promised delivery of the product within two weeks and the merchant still has not delivered after 3 months.
  • Groupon posted a royalty-free image as an illustration of the partner’s business: hairdresser, beauty salon, spa institute or other service provider. What a disappointment for the consumer who discovers a small room which is not always clean and where the personnel is not too professional.
  • Impossible to make an appointment before June when the validity of the coupon ends in May.
  • Impossibility to be reimbursed. Although Groupon offers reimbursement solutions, it is never a 100% one.

 Another risk is the client in search of good local retailers who after having been satisfied with their products or services, will contact them directly and leave Groupon behind.


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