All Grouped Out

I don’t know about you, but I’m Grouped Out from Groupon.

Ever since Groupon came to my little city of Asheville, North Carolina (population 83,000), I’ve been bombarded not just with offers from Groupon, but by at least three other local Groupon look-alikes. It’s exhausting just trying to decide which deal to take advantage of. I already have one Groupon that I’ll probably never use.

Now I find out (not surprisingly) that Facebook will launch a Groupon-like test in five cities as part of its existing Deals program, offering discount offers from local businesses.

And if that’s not enough, Google, Yelp, Travelzoo, and OpenTable are all working on Groupon-like features, reports the New York Times. Amazon is in the mix, too, with a $175 million investment in LivingSocial, the largest Groupon competitor.

When I wrote about 2011 being the year of the eCoupon, even I couldn’t predict the onslaught of Groupon look-alikes that we would see by the first quarter of the year. Hundreds if not thousands of companies are launching look-alike services to capitalize on the Groupon phenomenon which, at latest count, is up to 60 million subscribers. With more than $1 billion in venture capital and $760 million in annual revenue, Groupon has become the fastest-growing Web company ever, according to the Times.

What’s happened, as online marketers might have expected, is the Groupon copycats are now working below the radar; in other words, as the Times puts it, “they are relying on a strategy called fast following – the idea that copying a blockbuster start-up yields fewer risks and potentially great rewards.” Even more to the point, the bottom feeders are figuring out how to go after niches that Groupon is too big to address.

Just about any niche audience can be targeted by a Groupon look-alike – religious or ethnic groups, small businesses, the gluten-free crowd, vegetarians, pet lovers, or micro-segmented geographical areas, like Southern California’s Conejo Valley. Conejo Deals, mentioned in the Times article, was built off co-owner Rob Jaffe’s Little League team’s subscriber list. The local service now has 10,000 subscribers and more than $700,000 in revenue since starting last April. It’s unlikely Conejo Deals will face competition from Groupon, but if it does, Jaffe says he already has the loyalty of local merchants because “he visits them in person the day after a deal runs, bearing a spreadsheet and, more important, a check.”

I’m all for free enterprise, but enough already. How many discount deals can a consumer handle before he or she glazes over? And what about the merchants – are they getting a fast infusion of business that won’t last? Will it come at such a low price that both their credibility and profitability are damaged? You have to wonder.

Still, the madness continues. There’s even a secondary Groupon market – Yipit consolidates daily deal offers. So does Yahoo! and Bing Deals.

Then there’s Lifesta, a company that buys and resells unused deals from Groupon and the look-alikes. Now that’s a service I can use.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

Website: http://www.barrysilverstein.com