The social media aspect of Groupon puts unneeded pressure on consumers to purchase deals. Facebook and Twitter "friends" may pressure their followers to purchase unneeded Groupons and ultimately cause their followers to lose money if they never redeem their Groupon. Also, if news feeds are clogged up with advertisements and pleas to friends to purchase the Groupons they have invested money into, it could cause frustration. Sometimes "news feeds" can be so jammed with certain things, it is hard to actually use them for the purpose of seeing different status updates and tweets from more than just their avid Groupon-user friend.
Groupon is also a prefect example of hegemony. The majority of the people using Groupon are more inclined to purchase those that have more purchases than others. A certain group of people that are regular Groupon users can use their purchasing power to lead others to believe that what they are buying is the right thing to buy. Groupon has a quota that makes sure a certain number of people buy each deal before the deal activates which contributes to the power of a small group of people to convince others that the deal they want is the interest that everyone should share, even if that interest is not actually shared. This can lead to a false sense of shared interests. (Storey, 79-80)
Overall, Groupon has many positive aspects that tend to outweigh the negative aspects for consumers. However, merchants tend to suffer and often regret their use of Groupon. For additional reading on the negative aspects of Groupon for merchants, please visit the reference links shown below.
Reference links:
What Daily Deal Companies Should Do to Help Merchants
10 Reasons Why Groupon is Terrible for Merchants
Groupon's Whale Problem
Video:
http://www.youtube.com/watch?
At first, I was sure that Groupon was a positive development. The daily deals will open users up to new stores, restaurants, and service providers. While small Mom and Pop stores aren't participating in Groupon, this doesn't mean that they won't ever be able to. Once this option is opened up to these Mom and Pop stores, they will increase their number of customers. However, after reading some of your reference links, I've started to see Groupon in a different light. I was very surprised at how much it helps customers at the expense of merchants. Customers will buy these Groupons for a business that either a) they never visited before and will never visit again after they use their Groupon, or b) they visit often, meaning that they are getting a discount on something they were okay with paying full price for in the past. These negatives would absolutely destroy a small Mom and Pop stores, maybe it is best that Groupon does not expand to include them. Hopefully these issues can be sorted out so that Groupon benefits the merchants as much as it benefits the customers.
ReplyDeleteI was just as (if not more) shocked as Anna. I originally thought this was a great setup, but I did always wonder what the catch was. If it was never here before, how is it here now? Is it really good for merchants? The links posted by Kristina were enlightening. And as a merchant I personally would never work with Groupon because of the legal obligation to always honor the Groupon because it never expires. That's crazy. Customers can come in 5 years after a deal is run and still get the value of the Groupon from the merchant.
ReplyDeleteI was also surprised that Groupon can be seen as a huge negatives for businesses, but at the same time, I think it can still be seen as a positive. You are still getting the word out to the users of groupon who may or may not know about the business. And they may love the business that they got off of the original groupon so much, that they may become a usual customer of that business. That would be a great positive for the company, even though there are definitely risks and potential negatives of using the Groupon resource.
ReplyDeleteI think that Groupon is a potentially great development for closing the wage gap in this country. The middle class is shrinking rapidly, and the availability of valuable coupons on what are seen as "luxury" items can positively stimulate the economy while at the same time allowing people to have a higher standard of living than what would have been previously allowed. Small businesses offering services such as facials or fancy birthday cakes would be the first businesses to drown in a recession (as we've seen for years already), so lowering prices in order to remain in business is nothing if not prudent.
ReplyDeleteIn addition, users of Groupon can feel as if they're earning the discount by subscribing to the site and recommending friends. A community of thrifty shoppers is certainly more desirable than many individuals who cannot afford to purchase non-essentials.
I see Groupon as a win-win situation for all parties involved. I feel like businesses would use Groupon not to seek out immediate short-term increase in demand and customers, but to promote their name, increase awareness, and bring in more customers over time which will then lead to greater revenue. Often, the businesses using Groupon are small businesses attempting to becoming a larger player in their respective industry by using Groupon as a catalyst.
ReplyDelete