... but an interesting story in any case.
Chunka Mui (great first name) in Forbes:
http://blogs.forbes.com/chunkamui/2011/06/09/will-groupon-make-consumers-more-fickle/
Groupon is launching a pilot program with Big Y Foods, the Massachusetts-based grocer. The program is significant because it represents a move upstream for Groupon, beyond the traditional salons, restaurants, and other small retailers that have been its bread and butter. The pilot program will help test the efficacy of the Groupon model with large retailers, for whom multistore environments and easy integration with existing point-of-sale systems are big issues. Buyers of the pilot Groupon offers will not redeem them using coupons; in an interesting twist, redemption will be integrated with Big Y’s loyalty program. Here’s how Direct Marketing News describes it:  The initial deal, which is redeemable at all 61 Big Y stores on June 7, offers consumers a 40% discount on a pre-packaged seafood purchase. Consumers who buy the deal will be required to enter their Big Y Express Savings Club membership number for the deal to load on their loyalty card. Customers who do not have loyalty cards will be automatically signed up for an account.
The integration with Big Y’s loyalty program might be a big deal. At the least, it’ll be easier to assess whether Groupon offers attract new customers to Big Y, and to follow the overall buying patterns of deal-takers.
We're in Mass, btw, and I've never seen a Big Y store. Nothing in this story makes me want to become a Big Y "consumer."
His follow-up:
Interesting stuff about Groupon in the UK and Ireland there. Here's how Groupon is both the antithesis of VRM and even of sane retailing:
...consider how Groupon accounts for revenue. As reported by Rakesh Agrawal in a recentBusiness Insider posting, Groupon treats the entire deal value as revenue, with the merchant split recorded as “cost of revenue.” Nitsan Hargil, director of research at GreenCrest Capital, explained to me that, from an accounting standpoint, Groupon “has to do this,” because it does not pay merchants immediately, but rather pays them in three monthly installments. It might well be that Groupon’s method is nothing more than accounting gimmickry—and not a bad one either, as it effectively gives Groupon an enormous float and more than doubles its top line revenue number. (It also might place Groupon in tax jeopardy, as Agrawal points out, if taxing authorities interpret this as meaning that Groupon is the actual retailer.) The more interesting strategic question is to take Groupon at face value and consider the implications of deal-buyers being Groupon’s customers, and not the merchants’. Groupon already leverages third-party rating engines like Yelp and Google to help consumers assess merchants. Over time, expect Groupon to field a more sophisticated, Amazon-like rating engine to learn more about the likes, dislikes and preferences of its customers. As Groupon participates in a greater share of the customer wallet and sees buying behavior across many sectors, it will know customers better than the individual merchants.
Doc
|