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Today’s (August 20th) Groupon deal was the first time the group-buying coupon site has ever hooked up with a national chain for a deal. The site primarily teams with local retailers and businesses to give great discounts on a wide variety of products. The offer today is for $50 worth of goods from Gap for only $25, a %50 off sale on any products on the shelves. This is a great deal (for both consumers and Gap) for many reasons:
– Gap is a very popular store with great clothing for a cheaper price than a lot of stores in the same “genre” of clothing,
– It’s back to school season which means people need good clothes to look fresh for school, and Gap is cutting everything in-store to half-price, and
– Though Gap will be losing money on every purchase made, it’s a much better value than spending millions on a national television campaign that doesn’t result in thousands of sales.
Why is a deal like this so important to Groupon, national retailers, and consumers? Check out this article on Mashable about the overwhelming results of today’s deal. After reading that, start reading between the lines. A deal that gets hundreds of thousands of consumers committing to buying $25 worth of product in your store, not online, is worth the revenue loss. It’s an interactive national commercial that generates sales…a television commercial advertising a 50% discount is both expensive and will be ignored by millions of people who are too busy DVR-ing their shows to skip said commercial.
This is only the beginning because national retailers are going to start seeing the type of response Gap had with this Groupon deal…and are going to do this themselves. One company being successful isn’t enough to win just anyone over, but one or two more successful coupon deals like this and it will become all the rage. Groupon has no qualms against it because they aren’t the ones fronting the lost revenue…and national retailers are getting in-person exposure to hundreds of thousands of consumers going to their stores. Other than the lost revenue (which can be gained back from these consumers returning to the stores/new shoppers who are just taking advantage of the deal returning in the future) there is little downside to a successful campaign like this.
I would have taken advantage myself, but I was busy…though I can admit this is the first time I’ve ever been mad about missing a Groupon deal before. Keep it up Groupon!