Groupon fights for its life
A Raymond James survey of roughly 115 merchants that used daily deals services during the fall found that 39 percent of merchants said they were not likely to run another Groupon promotion over the next couple of years. The top reasons cited were high commission rate and low rate of repeat customers gained through offering a promotion.
The survey also found that 32 percent of the merchants reported losing money on the promotions, and nearly 40 percent said the Groupon offer was less effective than other types of marketing.
I've always maintained that this is a hype driven business built on an unsustainable business model both for the merchants and for Groupon, said Rakesh Agrawal, principal analyst at reDesign mobile, a San Francisco consulting firm.
Existing customers interested in signing up for daily deals has waned – Groupon reported last week that the average revenue per active customer (defined as an account that has purchased a deal from the site in the previous 12 months) fell to $63.96 in the 12 months to Sept. 30 from $76.49 a year earlier.
The company has also suffered a string of high-level executive departures as its market value has shriveled to just $1.8 billion, down from nearly $13 billion when it went public. Groupon has also been dogged by controversy over its accounting methods, though it said last
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