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Can Groupon Remain the Daily Deals Leader?

Inside perspective on Groupon's role in the space

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[ Technology]

Not too long ago, Facebook, Twitter, and Foursquare each had their turns as the new hot startup. While all these platforms are very popular and are continuing to grow, the social spotlight has expanded to a new area called “daily deals.” These deals have absolutely taken the world by storm over the past several months.

Although there are many players in the space and more rising daily, Groupon has emerged as the leader. While there are many reasons for Groupon’s popularity, Patty Huber, the company’s leader of social innovation, offered an interesting perspective on its rapid growth.

“We really cut above the clutter of all the options that people have and give the perfect excuse to try their cities with the great deal,” she said.

Interestingly, Groupon began as a collective buying platform called The Point. It developed from there into a service that presents consumers with daily offers. Because it only wants to give users the very best deals, Groupon reaches out to businesses that it believes would be engaging and appealing to subscribers.

“We only want to feature the best things to do, just like we only want to feature the best causes to do,” said Huber.

Even with the service’s vast popularity, most people don’t know that Groupon also works with local charities and non-profits to promote social good. According to Huber, the company tries to create opportunities for subscribers to take action. For example, users visit the site for the “daily deal,” and while there, Groupon promotes a complimentary social cause and encourages them to donate money, volunteer their time, participate in a local event, and more.

Because the couponing space is still in the very early stages, there are almost as many challenges as there are opportunities for Groupon and the other players. For starters, will the craze last? Secondly, in addition to the competition, there are also websites rising up that allow users to sell their “daily deals” before they expire. Since these challenges will only continue to grow, what will come of these couponing sites?

As the leader in the “daily deals” space, Groupon plans to further develop its platform for both businesses and users. As Huber explained, the company will launch more deals in more cities and will enhance its personalization process to better meet user needs.

Based on a recent report from Local Offer Network, the couponing space is projected to reach $2.66 billion this year. The report also suggested that more businesses would embrace the space and that competition would increase. With this data in mind, does Groupon have what it takes to remain the leader?

Can Groupon Remain the Daily Deals Leader?
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  • http://zooyan.com Jason

    Hi Abby,

    I like the perspective you gave here. In many ways I believe it will be tough for Groupon to maintain their leadership role in the industry, not just because of all of the competitors, but also because their size prohibits them from switching directions quickly. Smaller companies such as ours can respond to changes in the market and develop products that people want which is what we created with Zooyan.com. Our site is a marketplace for local offers that follows a model more akin to Amazon.com rather than Groupon. Please take a look, I’d love to hear what you think. Also feel free to email me if you’d like additional info.

  • http://www.getmomuffins.com Robin

    I think they can do well but seems they need to expand their sales/response team. Having to wait almost two weeks for a rep to even call back is the one thing that could easily sink them. If they beef up their sales and response teams they’ll be in a good position.

  • http://www.loveonedaysales.com/ Sheldon Nesdale

    It is certainly interesting times Abby, thanks for your report. If you need to keep track of ALL 172 Daily Deal websites then all you need is http://www.LoveOneDaySales.com/

  • http://www.loyaltics.com Dhana

    I doubt !. Because Groupon doesn’t have a Technology per se but just a good biz model and obviously it will invite many competition too challenging their position.

    Even here in Singapore, companies still prefer local group deal sites than Groupon !

  • Blessed Damozel

    Definitely if they keep pace with the market demands and offer prompt customer service. People strongly believe that the other name for deals is Groupon. I believe that you might be knowing that what cost Groupon to achieve this point. Its an effort of years. And whoever is going introduce the “daily deals” service won’t find it easy to make for the position Groupon holds, however they may be equipped with technologies.

    Why do we look for a deal? Just to have our desired thing at our desired prices. So, it means that we have already decided what to have and at what price to have, we simply need a spot to buy. So, I don’t think technology is going to have any kind of big effect on it.

    And, moreover, within these Groupon has built such an image in the customers mind, they straight go to groupon for a deal. The home page itself displays deals whereas the case cannot be show with FB, yahoo or Foursquare.