Groupon, a well-known daily deals website, made headlines at the end of February when its CEO and founder, Andrew Mason, wrote a company memo regarding his departure from the company. The memo read, “I’ve decided that I’d like to spend more time with my family. Just kidding — I was fired today.” The casual tone he took regarding his ouster unsurprisingly raised some eyebrows, as did a few of the other decisions he made during his time at Groupon. However, some have interpreted Mason’s departure as a writing-on-the-wall moment for the daily deals industry.
Groupon was at the forefront of a thriving movement that sent out gift certificates and coupons for both local and national businesses straight to subscribers’ inboxes, yet the company’s stock was going for a mere $5 the day after Mason’s announcement. Many other daily deals organizations, like LivingSocial, are also feeling the pain — and perhaps your newspaper’s program is too.
CNN’s Doug Gross examined some of the reasons subscribers grew disenchanted with daily deals programs such as Groupon in his article, “Why the Online ‘Daily Deals’ Craze Fizzled.” Some, similar to Gross, believe that daily deals had their heyday, but now their days are numbered. However, there might be something that can be learned from Gross’ insights that can be taken to improve your paper’s daily deals and maintain their relevance to consumers.
Deals or Spam?
Although Groupon originally incited a lot of excitement and gained many subscribers, it quickly became clear that the emails began to be viewed as spam. Any average Joe with an email knows the plight of an onslaught of emails: Some need immediate replies and others originate from countless lists you signed up for — favorite stores, social media sites, and of course, daily deals programs. Any opportunity to get a discount at a restaurant or grocery store is alluring, however, in the bigger scheme of email, these often are the first to be deleted when trying to shuffle through daily spam. As Gross pointed out, there were even programs created to unsubscribe from daily deals or streamline the offers into one email. This certainly was not a positive omen for sites like Groupon.
Irrelevant to the Consumer
Another issue facing daily deals was their lack of relevance to the subscribers receiving them. As emails build up in number, but the number of useful deals don’t, it becomes increasingly easy to click the trashcan button without even opening the email. For instance, hot air balloon rides or a discount on renting a limousine? These aren’t really everyday buys to begin with. This, in addition to the sheer number of emails being sent, decreased the relevance of the deals to the subscribers.
In theory, sites like Groupon offered a great PR opportunity for participating businesses, but it turns out that the subscribers weren’t the only ones growing dissatisfied with daily deals. Although it was reported that the majority of participants were pleased with the results, Gross mentioned a few stories of businesses that said the deals left something to be desired for their own profits. Businesses, especially restaurants, fell victim to customers that cashed in on the discounts, but it was a one-time occasion. Oftentimes, these customers moved from one deal to the next rather than creating a semi-regular, let alone lifelong, customer. Moreover, some restaurants found that those using the deals rarely tipped well on their meals, proving to be a loss for the business.
Fifteen Minutes of Fame
Unfortunately, the very nature of the Internet seems to have an element of “viralness.” Not unlike your favorite Youtube video of a panda cub sneezing, Groupon seemed to have its 15 minutes of fame (Gross pinpoints the 2010 to 2011 era). With this short-lived fame comes an almost larger than life presence online and in the lives of consumers, paired with a just-as-quick burnout into irrelevance. The modern digital consumer is always looking for the next big thing and another way to simplify their daily lives, the question is how do the Groupons of the world adapt to keep up with the fast pace?
With that said, Groupon has made changes to stay in the game. Since one of the biggest issues was that users grew sick of the number of emails and the deals’ lack of relevance, the site created a search engine so subscribers could search for what kind of deal they want. This is a huge improvement for consumers that were opening the emails and crossing their fingers that the deal would be of use to them. This is just one example of how daily deals have changed to maintain their spot in consumers’ lives — it’s up to your ad department to consider how technology, the modern consumer and the newspaper itself are changing (and they are, every day) in order to create the best product and offerings possible that keep readers interested and coming back for more.