Get Excited for Group Coupons

Groupon: Where the social web and smart shoppers unite resulting in collective buying power.

The Concept:

The idea is brilliantly simple: present a great deal and if enough people commit to it; the retailer will honor the price. Essentially, it’s a numbers game.  Though the deals seem “too good to be true,” they only take effect once a pre-determined number of consumers have committed to purchase a service or item.  Because retailers control the number of coupons (and can guarantee a base redemption rate) they can ensure the offer makes financial sense.

Basically, it’s buying in bulk to get a better deal.

In a down economy where deals often drive consumption, Groupon encourages savvy consumers to do what they do naturally: seek out the best deals. Only now, they’re incentivized to spread the deal around.  It’s a win-win situation for both the consumer and the business.

The Leader:


Groupon's Logo

Serving over 45 cities, Groupon is nearing the almost 1 million coupons “bought” (937,596 as of this writing). It claims to have saved consumers over $40 million dollars at a combination of local businesses and e-commerce sites.

Launched in November 2008, Groupon began as the side project of a site called The Point, a community-organizing hub where users start a campaign asking people to give money or do something as a group. If enough people commit, the campaign reaches a “tipping point” and the action is set in motion.  Though conceptually similar, Groupon, focuses exclusively on coupons and deals.

We want each Groupon purchase to feel too good to be true, from the moment you buy to the day you use it. If there’s anything unusual about a deal (e.g. an inconvenient location), we go out of our way to point it out.(About Us,

Similar Models:

Daily Wish by American Express

Daily Wish by American Express

American Express is employing a similar model.  Their “Daily Wish” offers quantity-limited hot deals to card members during the Holiday season.  On Thursday, December 17th they are even offering three brand new 2010 BMW 328i for only $16,838.00!

Woot's Daily Deal

Woot's Daily Deal is well known and has been around for quite some time.  Woot’s deals are not only quantity-limited (once they’re out of stock, it’s gone) but also time-limited.  Each deal last’s for one day only (sometimes less).


Because the deals are contingent on large redemption rates, they incentive grassroots campaigns to spreading the word.  If the minimum isn’t met, then the deal doesn’t happen, so if you want it, you have to advocate for it. Additionally, offers are time-sensitive so they appeal to the “buy-it-now” mentality at a time when “wait-and-see” is the popular MO.

Impulse buyers might want to watch out, it can be addicting.

Pros of Groupon:

  • You can purchase gift coupons for your friends
  • It’s easy to use
  • For business, it’s a guaranteed way to get people in your door. Lots of people!
  • It gives consumers a chance to try new experiences that they might not otherwise try.
  • If a business closes before you get to use your coupon, Groupon will make sure you get your money back.

Cons of Groupon:

  • Returns are handled on a case by case basis. So don’t buy unless you are serious about using the coupon.
  • The Groupon coupons expire, usually within a year — but there’s no such thing as a coupon that lasts forever.
  • Usually, only one deal a day is featured for your city.

My takeaway:

I purchased my first Groupon just a few weeks ago and I feel really good about the value and overall usability of the site.

I have yet to redeem my Groupon so I can’t say any comments about the “full” experience or customer service but I will probably be back on a regular basis looking for a deal that fits my lifestyle.

There’s nothing better than getting to try something new and not feeling guilty about the price.

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