in honor of the groupon IPO this past friday, i thought i would do a groupon themed entry.
groupon origin story – a fun “social network”y story of groupon in the sense that it humanizes that groupon story and shares fun facts about the fastest growing company in history.
“[The] way we rationalized it with ourselves,” says an early employee, “[was that we were] helping people find interesting things to do in their city.”
“Some of the early things we did were an hour in a sleep deprivation tank, or skydiving. We [didn’t] want to do stuff that’s going to wind up in a landfill. We [didn’t] want to sell overstock gadgets. We [didn’t] want to deal with shipping and returns.”
safe to say that that is not the case anymore, i think.
fun groupon charts and data and here – they have an impressive array of metrics, many of which i would have never thought of. and dare i say, makes me nostalgic of my days in management consulting. GOD I LOVE CHARTS. (the sites (both via business insider) also tell a nice story if you’re into that)
PERSONAL GROUPON DATA
erik k actually was the one who inspired me to do this. he made some disparaging groupon comment, and i was like “I USE A LOT OF GROUPONS ACTUALLY”. anyway, some questions and answers from my own data: (disclaimer: i promise bain really did teach me how to make pretty, interesting charts that convey helpful information effectively. part of me definitely wanted to spend more time on this, but cmon, this is a blog that is unsustainable enough already.)
what is groupon’s market share?
starting off with a softball. almost 50% by deal value and groupon count. which i think is… slightly lower than actual groupon market share. “other” consists of 6 other vendors, which makes for a lot of spam every day (not to mention those that i haven’t purchased from). but there is consolidation in the space; townhog purchased by buywithme which was then purchased by gilt.
how often do your groupons expire?
really not the best about this. about 7% expirage. whoops. coupon fatigue!!!
how many vendors basically are losing out on money that they would have gotten anyway? ie customers that already go there, but bought the groupon to get that extra savings?
so in retrospect, i don’t think this chart really answers the question because there’s no guarantee that i would have spent full retail money at the vendor in the future if i have used them before, but let’s just assume that i will. if that is the case, the red “used vendor before” bucket all lost out on 50% due to the groupon discount, then another 25% for groupon fees. so basically, vendors lost out on about $650 in money that i would have spent on them otherwise?
UPDATE: in retrospect, they really are only losing money if a) used vendor before, and b) willing to pay full retail price on, which is a fraction of the above red bucket.
how many vendors “win new customers” by virtue of using groupon?
so basically these are vendors that 1) i wasn’t planning on using, that 2) i would pay full retail price to use again in the future. so that is a whopping 4/49 (so around 10%) of groupons. that’s not bad, 10% conversion rate? (though these vendors are rickshaw (don’t need to buy another bag anytime soon… but i would), bootcamp (haven’t done this retail again… though i would), whole foods (okay, this is sort of weird because i haven’t been to whole foods, but would still pay full retail if i were ever there… so not a true conversion), and seamless (again, not a true conversion because i would pay full retail for it, i just haven’t used it before)–so the 10% conversion has yielded $0 additional income for these vendors. whoops.)
UPDATE: in retrospect, the above categories don’t really capture whether or not people would be repeat customers. BAD SURVEY CONSTRUCTION. but it should be something like “more inclined to shop here than other vendors” or something, not just willingness to pay combined with whether or not you have used the vendor before. something to track changing views of the vendor.
GROUPON THOUGHT CATALOG PIECE
there was a day when i really, really, really wanted to get an essay on thought catalog. i was going to write about groupon, but now it is a little bit not topical. ugh. anyway. a teaser. will release soon.