Growth

Rich and Co.

Study: Groupon Business Model Has “Red Flags”

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“The major take-away from the study is that not enough businesses are coming back to daily deals to make the industry sustainable in the long run,” Dholakia said. “And our results from three studies and close to 500 businesses surveyed show that the deals are nowhere close to the rates of financial success for participating businesses that some companies claim to be having.

“Our findings also uncovered a number of red flags regarding the industry as a whole,. The relatively low percentages of deal users spending beyond the deal value (35.9 percent) and returning for a full-price purchase (19.9 percent) are symptomatic of a structural weakness in the daily deal business model.

Worth reading whole article – it’s short at – http://www.sciencecodex.com/forecast_tough_times_ahead_for_daily_deal_sites

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Written by Rich and Co.

June 16, 2011 at 1:02 am

Posted in Social Media

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