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Groupon Fail? Site's First Big-Ticket Promotion Attracts Only Four Buyers
In its first push into big retail, Groupon only sold four $199 vouchers for $500 toward the purchase of a car at a Michigan dealership.
Posted 7/ 18 11 at 6:30 PM | News, Sales, Online Business, Consumer Products & Services
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Not everyone's a winner in the Groupon arena. Last week, the online coupon giant launched its first effort to get into big-ticket retail, with a $500 voucher toward a new car sale at a Michigan dealership.LaFontaine Buick-GMC-Cadillac of Highland, Mich., tried to lure customers by paying $199 for $500 worth toward a vehicle purchase. The four-day-long promotion only attracted four customers, two of which Robert Milner, LaFontaine's general sales manager, sold vehicles to.
Deals offered through Groupon have to sell a minimum number of vouchers in order for the coupons to be valid. In LaFontaine's case, 10 customers needed to make the purchase during the original two-day sale offered July 12-13. The deal was extended after not seeing much traffic, but still only attracted four buyers. Although technically invalid, the dealership honored the vouchers for the two customers who showed up to purchase vehicles.
An Automotive News report proposed several reasons why the deal was a flop as opposed to some of the wildly successful sales on the site. First, customers of daily deal sites are accustomed to hefty discounts, so consumers "may have dismissed $500 off on a $30,000 car as not enough." Also, most deals are offered on products that have a fixed price that consumers can verify. "Consumers were skeptical, thinking the dealership would boost the price to offset the $500 discount," Milner said.
Groupon promotions need to sell well in order for retailers to break even, since the deep discounts they offer significantly cut into their profit margins. The real payoff is if deal customers return to the business for future purchases.
Although the initial offering was unsuccessful, Groupon doesn't plan to give up on the big retail market. Groupon spokesman Chad Nason told Automotive News, "We'll look at what this deal did and tinker with what we can do in the future."
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Comments (Page 1 of 1)
But they need to understand that many will see that $199 toward $500 off a new vehicle is nothing as the dealerships play with the numbers to make the adjustments. So you never really save anything. And knowing that the marketers need to get paid for their marketing campaign the 'lucky' end user probably isn't saving anything.
That $301 off (as the paid $199 for the $500 off) is easily swallowed up in 'Dealer Fees'
So their first mistake was thinking that the public in general never went to Math class....its almost insultive.
When you have a REAL bargain to bring new customers in then let us (the public) know. But dont play us as if we were all morons! You lose our respect and then 'Next big deal' you come up with we most likely won't even take a second look at.
You are right, it is insulting, but there are a lot of morons out there.
Just look at Washington D.C.
Well, DUH! Who can afford a new car in Michigan? Haven't they checked the latest unemployment rates???
Hello??????? a little electronic version of a little square piece of paper from a throw away circular being used for $30,000 by saving $300.....hmm.....let's see, that's......uh.......ummmm oh ya, 1%
Boy oh boy.....1%
When they decide to offer Hybrid cars for 65% off to really get the ball rolling on the green lifestyles, and actually start working in tandem with the government to make deals like that, which are real, and can make an impact on life as we know it, happen, then its all just another marketing ploy, and none of the prices are real. A 20 dollar dinner for 10 dollars is really a 7 dollar dinner for 10 dollars.
The bigger question is, "How did this become newsworthy?" I'm sure theres a subliminal message being conveyed here... something like, "Dang, come on guys, we are Groupon, we are big, bring us some more deals, we want some big deals, we're all on commission here.
Seriously though, 199 for a 500 dollar voucher towards a new car purchase at a dealership? That has to be the funniset thing I've ever heard in my life! That is obviously geared towards people with little to no experience at a dealership, or favors a specific set of persons who are already in the midst of buying a car anyway, and just need a little bit more money off. It does more to show Groupons real place in the market than anything else.
If they're serious about marketing in such a way, then you give the $199 back also, such as in gasoline cards or something someone can touch and feel and use, or eat, or squeeze. Anyway, anything else is just a downpayment, disguised as getting a lower price.
Notify me when the deal is actually a bargain, on something made of metal, or plastic, and not a service which can be manipulated to suit any price point. Go to the manufacturers and work out quantity buying strategies and pass those savings on to customers in a realm that would do the most good for everyone.