Apr 27, 2012

Deal or No Deal?

I saw this Groupon kiosk at Navy Pier, Chicago. Catering mostly to the 'touristy' crowd I presume, who could explore and buy location/time specific deals.

What got me thinking was that it serves two very important stimulus to buy-
  • Instant Gratification- providing buyers what they want right 'now'; not later and not making them to wait. 
  • Deals, Discounts!! 
Will it be a success? I'm not quite sure... I just browsed the kiosk to see if the interface worked properly! :-)

But the realist in me find it quite hard to believe in the business model of a daily deal site (like Groupon). Afterall, the business of business remains the same i.e. to make money. As long as it doesn't lead to customer retention where is the return on the investments made in the form of deep discounts? Without any stable customer relationship there cannot be any Customer Lifetime Value (CLV) to start with, isn't it? 
All I can see is a bunch of 'deal hunters' moving from one deal to another. Neither Groupon is winning nor the advertisers.

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