A while back I wrote a post, predicting that Groupon as we knew it then would not be a viable business. I was motivated by them turning down 6 Billion dollars from google, in what may turn out to be a disastrous business decision. At the time many many many people commented, tweeted, and refuted my claims. Most liked to consume the deals, which is obvious, they are amazing deals for consumers and disastrous for small businesses like restaurants.
If you haven’t read my original post on Groupon there is a clip and link to it at the bottom of this one. Since that time, Groupon has been virtually caught by its biggest competitor and about a thousand new competitors have sprung out of nowhere. The 1920’s Massachusetts view of alcohol has prompted the state to start an investigation into the discounting of Alcohol by Groupon as well as whether them taking money for what amount to alcohol sales is in effect selling without a licence. A legal challenge that many expect to be picked up by 25 states with similar laws.
The biggest problem is the competition, Groupon has now had two months in a row of declining sales. Why? More outlets knocking on businesses doors, more of those companies deciding that selling their product for 75% off is a bad idea, and the fact that it gets complicated when the law ets involved in what a groupon can be applied to… consumer fatigue with emails overload, and less attractive deals.
Here is the original post: