Fresh Skepticism About the Groupon Model Following IPO

Groupon’s successful public offering last week isn’t enough to quiet the critics about the longevity of the daily deals industry.

New research was released today by Forrester on Groupon’s second day of trading on the public markets. In midday trading, the daily deals giant was down 17 cents, or less than a percentage point, to $25.94.

In the report, Forrester’s biggest dig on the space is that it has created “deal-hunting gremlins,” who are getting a discount on services they would normally be willing to pay full price for. Additionally, analyst Sucharita Mulpuru finds that the daily email model is expensive to scale and that consumers will ultimately unsubscribe as offers fill up their inboxes.

Other findings:

    • 29 percent of subscribers of coupon and flash sales sites have unsubscribed because they don’t want to receive so many emails
    • 49 percent don’t sign up because they don’t want to receive more email
    • 83 percent receive emails from Groupon
    • 41 percent receive emails from LivingSocial
    • 26 percent of subscribers have purchased more than four offers.
    • 36 percent have never made a purchase.

The survey was conducted from June 11 to 21 and had a total of 9,449 respondents.

(Image courtesy of Groupon’s Flickr page.)


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