Is Groupon the New MySpace?

Like many people when Groupon first came out I got excited about the large discounts they offered on local products and services, I bought a few Groupon’s and even went back afterwards without the discount. However over the last few months the daily emails they kept sending started becoming annoying rather than exciting, I wasn’t interested in 60% off a full head of highlights or a pedicure so I unsubscribed from the site and haven’t been back since. I’ve been hearing similar sentiments among my peers so I thought I’d take a look at the numbers behind the site to see how it was doing.

Taking a look at Groupon’s traffic stats, Hitwise, Google and Alexa all report that visits to the site have been falling over the past few months. It’s worth noting that we don’t have access to Groupon’s actual onsite analytics and the above are only estimates but if true certainly don’t paint a rosy picture for Groupon. It may well be that the summer months are a seasonal low point for daily discount websites, it’s a new category and so we don’t know the exact seasonal trends in this space, however equally likely is that the hype has died down, competition has increased and people simply aren’t as interested in Groupon as they used to be.

Groupon recently postponed their IPO citing unstable market conditions, however if these traffic stats are accurate they won’t help their cause if/when they do IPO, the recent class action lawsuit filed by their sales team against the company won’t be helping them either, perhaps they should have taken that $6 billion offer from Google? It will be interested to see if 12 months from now will they be worth more or less than $6 billion.

So what could Groupon do to create a more enticing user experience? An obvious move and one many of its competitors are taking is that personalisation will be key. I don’t want to receive emails about hair extensions, however I would be more open to receiving emails about discounted cinema tickets or sky dive experience days. Allowing users to select from a list of categories and then only receive discounts relevant to those categories will create a better experience for the user and a higher conversion rate for the businesses.

Tying in daily deals with location is another route they could explore. Imagine you’re in a shop but you’re ‘just browsing’ then your phone lets you know that for today only they’re running a Groupon on a specific item and it is 70% off! They know what categories you’re interested in and have suggested something you’re more likely to want. You would be able to buy that item immediately and also let your local social network know about this great deal (Facebook knows which of your friends lives near you)

What do you think of the daily deal sites?  Do you use them a lot, has your usage pattern changed at all?

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