I want to thank you for your insights regarding breakage and perishability - I had never considered this aspect of the Groupon model (having simply concluded that the reasons so many spas and restaurants were represented was due to their relatively higher margins compared to retail stores), but, particularly for restaurants, this would seem a great boon.
One concern the article seemed to overlook is the fact that Groupon's business model has a near zero barrier to entry - as demonstrated by the entry of so many Groupon clones into the picture of late. Given this and the fact that for many businesses (with exception of spas and restaurants) the 75% cut in revenue may in fact be unsustainable, won't this turn into a race to the bottom as to who offers the most advantageous cut back to the local merchant?
I suspect there is a reasonable barrier to entry - in that the large number of engaged mailing list subscribers required has a big first mover advantage. Nobody is going to want to be signed up to dozens of different daily deal mailing lists, so with Groupon already having a ton of subscribers they get a much better pitch to the advertisers.
I think a possible competitive strategy is much more highly targeted mailings - instead of approaching advertisers saying "we have 170,000 subscribers in your city", go with "we have 15,000 females in the 30-45 year old age bracket who earn over $85k" or "we've got 22,000 working mothers of 3-7 year old children", or perhaps "we've got 8,000 people who dine out 3 or more times a week in your zipcode". (I have no idea if Groupon are collecting and/or using detailed demographic data about their subscribers...)
One concern the article seemed to overlook is the fact that Groupon's business model has a near zero barrier to entry - as demonstrated by the entry of so many Groupon clones into the picture of late. Given this and the fact that for many businesses (with exception of spas and restaurants) the 75% cut in revenue may in fact be unsustainable, won't this turn into a race to the bottom as to who offers the most advantageous cut back to the local merchant?
"Try Grup-on! Like Groupon, only we split 40-60!"
".........................................30-70!"
".........................................20-80!"
etc.