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Groupon halts all firearm-related daily deals

Mike Flacy
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Groupon

Detailed on CNNMoney earlier today, deal-of-the-day site Groupon has abruptly stopped all coupons and deals related to discounts at shooting ranges and other firearm-related venues. Possibly stemming from pressure applied by gun control activists after the Sandy Hook massacre, Groupon will no longer offer deals for concealed weapons courses, clay shooting areas or any shops that sell firearms. In addition to halting all future sales of these types of coupons, the company also suspended firearm-related deals that were currently active on the site. 

groupon conceal carry permitIn a statement released by Groupon, director of communications Julie Mossler stated “Groupon has been testing firearm-related deals like shooting ranges and concealed weapons courses for the last eight months. Based on performance and customer feedback, it’s clear they’re not a fit right now.“

Mossler went on to state that the shift in policy wasn’t politically motivated and said the “change to our inventory is not a statement against these small businesses.”

Michael Cargill, owner of Central Texas Gun Works in Austin, spoke out against the shift in policy since he was running a Groupon deal at his establishment. That deal offered a two-for-one rate of $69 for a course to earn a concealed handgun license. The deal started on January 15 and he sold about 600 Groupons. Cargill wanted to increase the offer to 1,500 Groupons due to popularity, but the deal was canceled recently due to the shift in Goupon’s company policy.

target practiceWhen asked about the cancellation, Cargill stated “I was furious. My customers could not sign up for the deal. They called requesting that deal and then they were told by Groupon they could not purchase the deal because Groupon said they weren’t doing anymore gun deals at all.“

Cargill plans to contact an attorney about the cancellation of the contract. To date, Cargill hasn’t been paid for his share of the vouchers. However, Groupon typically starts issuing initial payments approximately one to two weeks after the deal ends. 

Cargill is attempting to raise support for a boycott of Groupon’s service with a social media campaign as well as direct contact with people that own firearms in his community. Regarding the boycott, Cargill said “I’m calling on every American who believes in the right of safe, lawful gun ownership to join me in refusing to hand over even one red cent to an organization who has no respect for recreational or personal protection who choose to exercise their constitutional right.” Groupon representatives have not released a statement regarding Cargill’s boycott campaign.

Alternatively, advocates of gun control are praising Groupon’s removal of all firearm-related deals. In a statement released to the Huffington Post by the The Coalition to Stop Gun Violence, director of communications Ladd Everritt stated “We, along with other groups, had been applying pressure to Groupon for some time now because we were disturbed by the flippant nature of previous gun deals. Even before Newtown, they were undoubtedly getting e-mails from users who threatened to discontinue their membership if Groupon continued to promote those types of deals, and I expect those emails have only accelerated in intensity after the tragedy.”

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Daily deal predictions for 2012: Who’s in, who’s out, and what discounts to expect
daily deals

The daily deal market is at a crossroads. In one corner, its advocates claim there’s new life to be squeezed out of the already over-saturated industry. In the other, detractors are screaming from the rooftops that Groupon’s controversial IPO process has been proof enough that the market is flawed and has reached its tipping point.
It’s been a tumultuous year, with predictions of collapse one day and promising statistics the next. And while the debate rages on, stand-alone sites as well as established platforms continue to jump into the fray, launching their own discount-a-day applications. So where is the industry heading in 2012?
Teaming up 
According to Tippr CEO Martin Tobias, the market will be rife with new deals and contracts, the biggest of them being a LivingSocial sale. “Going public would be hard for them because of just looking at what happened to Groupon, and investors are going to want their money back,” he says. “LivingSocial is having the same cash problem that Groupon has.”
A now-infamous problem: Groupon owed $230 million more than it had to its name when the company filed to go public earlier this year, and some iffy accounting metrics seemed to try to hide that fact. “They would have gone bankrupt at the end of the month if they hadn’t gone public,” Tobias says.
And it’s because of all this that LivingSocial will instead put itself up for sale. A likely buyer is Amazon, which already own a considerable stake in the company. But others are on the ballot as well, including the likes of Yahoo, Microsoft, and eBay. “Somebody with a large audience already,” says Tobias, “that adding this business to makes sense.”
It’s a smart move for these bigger companies, who can use LivingSocial’s man power to do the daily deals work for it. And according to recent Yipit data, Amazon’s already doing this: “Amazon, which invested $175 million in LivingSocial last December, continues to leverage LivingSocial’s sales force to sell its deals to merchants rather than investing heavily in its own sales force.”
There will also be plenty of efforts by smaller outlets to hook their fate to successful social sites (i.e., ScoutMob’s recent partnership with Foursquare). Containing the user experience within one app or site is better for the consumer, who doesn’t want to switch between applications to fully utilize everything that’s being offered.
Who’s out
To be brief, there’s one clear loser will emerge in 2012: The Groupon clone--something we've seen coming for awhile. Now to be clear, we need to define what that is exactly. A Groupon clone is a stand-alone site that isn’t affiliated with any larger company, that creates its own deals and b2b relationships and finds its own audience. It’s not Google Offers or Amazon Local, for instance.
These sites followed in Groupon’s and LivingSocial’s footsteps, watching the trend take a hold of the e-commerce scene. Unfortunately in this case, the first to the game may have sucked the niche dry before new competitors could even have a chance, and now they will experience the struggles but without the market share and investor relations to fall back on.
“If you’re already established, you don’t have to spend as much building this up,” says Tobias. “Groupon is stumbling and anyone new who wants to compete with it will similarly struggle.” Building a brand from the ground up isn’t easy, and those who are trying to do this on their own have missed the window.  
“I don’t think any of them have a chance,” Tobias says about these clones. “In the last six months 170 of them have gone bankrupt or closed and at the same time 120 of them have been launched.”
Who’s in
But there is hope: “The model isn’t screwed. The direct model is screwed,” he says. Sites that are adding daily deals to their already established platforms have a much better shot at success in this market—sites like Google Offers, Amazon Local, MSN Offers and the like.
Google Offers has had a relatively quiet introduction, although new data from Yipit shows it’s growing steadily. According to the same report, Amazon Local has recently experienced a surge in its expansion. These types, Tobias says, will play out in the long run because they are just part of an entire package of solutions for retailers.
Which brings us to what remains a large hurdle: merchant trust. Many local business owners have sworn off the scheme and the sleazy tales of vendors duped into terrible money-losing deals are never-ending. 
It’s been said time and time again that Groupon is in direct competition with the vendors who use it for customer loyalty, and often the consumers attracted to the site in the first place are motivated by saving money. But building this business around a site that people visit for a variety of reasons—to read, to chat, to email—could mean a very different type of e-commerce experience altogether. And Jerry Nettuno, CEO of small business solutions application Schedulicity says that the market still has room for improvement, and that this will play out next year: "Random go-for-broke deals will evolve into well-thought-out offers." So expect to see this evolution over the next year--from oulets that can manage to promote this kind of thing, which are likely to be big players and not fringe sites. 
2012 Deals: Travel and experience
The Yipit report shows that “spa and beauty” and “restaurant” offers continued to be incredibly popular, both in bookings and percentage of deals on the table. But there are a few emerging trends we’re likely to see in 2012. Groupon’s Getaways have been a solid performer, and a huge sell for the site.
Likewise, LivingSocial Escapes have taken off. “LivingSocial Escapes, LivingSocial’s travel product, experienced a 94-percent growth in gross billings in October after the number of deals increased 64-percent and vouchers sold per deal jumped 40-percent.” LivingSocial Adventures has also done well for the company, so it would stand to reason that experiences and travel could become increasingly important for the daily discount industry. 

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Groupon CEO calls IPO ‘a wild ride’ as share value rises

Groupon shares received a much-needed boost on Wednesday after its CEO, Andrew Mason, commented publicly for the first time since the company began trading on the stock exchange on November 4.
In a post on the daily deals site’s official blog, Mason announced that between Black Friday and Cyber Monday the Chicago-based company sold more than 650,000 special holiday deals, marking a 500 percent increase on last year’s figure.
Off the back of the news, shares in Groupon rose 9.3 percent, closing at $17.50, though this is still below the launch value of $20.
In the blog post, Mason also commented on the events of the last month. “Our IPO process was a wild ride, but we’re excited to get back to business and are focused squarely on the future,” he wrote.
Investors will be relieved to see the share value making an about turn - on the first day of trading, they shot up to just above $31 but then slumped to around $15 earlier this week.
Fear of tough competition from rivals such as LivingSocial and Google Offers appears to be one of the factors that drove the share price down.
Groupon, which launched only three years ago, raised $700 million in its IPO at the start of November, making it the largest IPO by an American Internet company since Google raised $1.7 billion in 2004.
Mason ended his post by promising that there’s more new stuff on the way for Groupon customers, writing in the post: “We’ve got even more lined up for the next six months than we did in the last six months, so stay tuned!”
[Source: Reuters]

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Anti-trust watchdog fines Groupon Korea for posting fake reviews
Groupon Logo (Dec 2010)

Groupon’s South Korean operation has encountered a bit of bother after it was fined by the country’s anti-trust watchdog for putting up fake reviews on its website and exaggerating the number of products bought by consumers.
The incident highlights just how competitive the daily deals industry has become as local rivals in the Asian country, such as Coupang and Ticket Monster, fight Groupon for a share of the market.
The Korea Herald reported on Monday that the country’s Fair Trade Commission (FTC) had fined Groupon’s Korean arm 17 million won ($14,773) for its wrongdoing. It has also ordered the company to put up a notice on its website detailing the penalty for a period of four days.
In a statement relating to the company’s misdemeanor, Groupon Korea said that the disingenuous reviews were put up before August and that it had since taken “corrective measures.”
Three other daily deals websites based in the country have also been fined for claiming to have sold more products than they really had, the FTC said.
Groupon pioneered the daily deals business with its launch in 2008. The Chicago-based company currently operates in 45 countries and employs around 10,000 people.
Earlier this month Groupon went public, raising $700 million in its IPO. However, since then some investors appear to have got cold feet, with its share value last week dropping below its launch price of $20. At the time of writing it stands at $15.24.
The drop has been attributed to a number of factors, including fears of increased competition from rivals such as Amazon-backed LivingSocial and Google Offers.

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