Groupon is a website and mobile app that offers a multitude of discounts, cashback on purchases, and group deals to consumers. With its appealing deals, restaurants, retailers, and manufacturers leverage Groupon to attract customers to their establishments or to promote their products.
The term “Groupon” is a blend of the words group and coupon. The company collaborates with providers of goods and services by showcasing discount deals, retaining a portion of the sales as a marketing fee. This fee percentage varies, commonly averaging around 50%.
“Unlock Savings Like Never Before”
Unlike generic coupons, a Groupon lets consumers prepay for a discount on future purchases. The typical discount ranges between 15% to 30%, sometimes climbing as high as 90%. For instance, a merchant may offer $50 worth of dining for $35 or a $200 spa package for $90.
Key Takeaways
- Emergence in 2008: Initially started as an online coupon site featuring daily deals, Groupon has evolved significantly.
- Wider Horizons: The platform now offers coupons, cashback options, and deals on diverse product and service categories, including travel packages.
- Business Transitions: By the end of 2019, there was speculation around Groupon exploring the acquisition of Yelp due to shifting business metrics.
Unleashing Collective Purchasing Power
The original concept of Groupon rests on the power of collective purchasing – large groups of consumers banding together to secure high-value discounts. This principle taps into “group” power, providing merchants with new customer influxes, hoping to cover the costs through volume.
Before 2016, Groupon’s model included a
Related Terms: collective purchasing, cashback, coupons, e-commerce platforms, local deals.
References
Get ready to put your knowledge to the test with this intriguing quiz!
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## What is the primary business model of Groupon?
- [x] Offering discounted deals on local services and products
- [ ] Providing online travel bookings
- [ ] Selling electronics and gadgets
- [ ] Facilitating peer-to-peer transactions
## How does Groupon typically find the businesses to feature in its deals?
- [ ] Operating its own services and products
- [x] Partnering with local businesses for exclusive deals
- [ ] Focus groups and surveys
- [ ] Mass manufacturing goods
## What advantage does Groupon offer to small businesses?
- [ ] Long-term free services
- [ ] Reimbursement of all marketing costs
- [x] Potential for increased customer traffic and exposure
- [ ] Unlimited supply of products
## What financial term is often associated with Groupon's business offerings?
- [ ] Bonds
- [ ] Derivatives
- [x] Vouchers or coupons
- [ ] Initial Public Offering (IPO)
## How does Groupon make money from the deals it offers?
- [ ] Producing and selling their own goods
- [ ] Hosting adverts on their platform
- [x] Taking a percentage commission on each deal sold
- [ ] Charging a subscription fee
## In which sector did Groupon initially gain its popularity?
- [ ] Healthcare
- [x] Local services and daily discounts
- [ ] Real estate
- [ ] Dietary supplements
## What is one risk for companies participating in Groupon deals?
- [ ] Attracting too many high-income customers
- [x] Possible loss of revenue if deals are too generous
- [ ] Overabundance of repeat customers
- [ ] Excess production of goods
## How do consumers typically access Groupon deals?
- [x] Via the Groupon website or mobile app
- [ ] Through mailed catalogues
- [ ] Retail stores
- [ ] Telephone orders
## What is a "flash sale" on Groupon?
- [ ] A long-term available deal
- [x] A short-term discount offer with limited availability
- [ ] A seasonal promotion
- [ ] A recurring monthly offer
## How can Groupon deals affect consumer behavior?
- [ ] Reducing shopping frequency
- [ ] Decreasing market competition
- [x] Motivating consumers to try new businesses or services
- [ ] Promoting product returns
