What will the future hold for Groupon?

Groupon has such a simple concept yet so appealing to all of us! Everybody loves discounts and now we can get them online. It really appears to be a win-win situation for everyone. The business only pays for the advertising if they get the business, the customer gets a discount, and Groupon gets a cut if the customer actually goes to the business. Of course, it isn’t that simple and there are a few drawbacks. First, you can’t just download all the coupons at once because they only offer one special per day (a big disadvantage in my opinion) so you have to visit the webpage daily and ideally share it with your friends. Also, in some cases it may be the case that marketers could actually losing money while advertising with Groupon at a very large level, although they might purposefully be doing it to gain awareness. Sam Diaz, editor at ZDNet recently posted a blog comment about how Gap in Chicago most likely lost money in a recent promotional push through Groupon.

Another major drawback (this time for Groupon) is that the concept is extremely easy to copy. Sites like LivingSocial(LS) are rapidly growing and although much smaller in revenue, last August LS got more web traffic than Groupon according to Comscore. Even though Groupon’s concept is easy to copy they have a major advantage that lessens this issue, which is top of mind brand awareness. Since I started thinking about writing this post, I have asked a lot of people where is the best place to find coupons online, and except for one person, they all said Groupon. Then I remembered that the one person who didn’t say Groupon doesn’t live in the US. He mentioned couponidad.com, the Colombian copy of Groupon.

The future of Groupon may seem uncertain to those who think that because the concept is so simple, it can easily be replaced by competitors. Although possible, I think that as long as Groupon keeps innovating and continues to be in the forefront of technology in what it relates to online coupons, they will continue to have the competitive advantage of having entered the market first. Google seems to believe the future of Groupon is promising as they recently offered to buy the company for $5.3 billion (the largest offer by Google ever). It also seems that Groupon think it is worth more and might be thinking of going public according to yesterday’s WSJ article. Only time will tell…

Do you know how YOU FEEL? Don’t worry, I WILL TELL YOU how you feel!

Don’t be surprised if you hear a marketer or advertiser trying to explain to you how YOU feel in the near future! They now have a new tool available that can actually tell you what your feelings are even better than you can sometimes articulate. The new field of study is called Neuromarketing. According to neuromarketingresearch.com, Neuromarketing is a combination of neuroscience, psychology and other cognitive science techniques that are used to study consumer responses to marketing stimuli. The technique uses brain scans, iris scans and heart rate tests among other things to see how people feel when presented with different products. To me it is interesting to think of an outside person telling me how I feel about something. For example, there have been occasions in which I try a new food and when asked if I liked it, I’m not sure if I did or not. Sometimes I just say “it’s different”. What does different mean? Is it good or bad? I can’t determine it myself but apparently, marketers can’t. Under a neuromarketing study, if I try the food and my heart rate goes up, that means I like it. I wonder how they are going to control for other elements such as the things that are going through my mind at that same moment, maybe my heart rate went up because I was thinking of the skydiving jump I did yesterday and not because of the food I just tried. Regardless of this potential drawback, neuromarketing is fascinating to me in the sense that we will now be able to understand consumers at a deeper level. Take the Campbell Soups’ example. It is obvious the company truly believes in this new method, as they recently changed their packaging and labeling based on neuromarketing result studies. A WSJ article explains that Campbell did a 2 year study in which they researched microscopic changes in skin moisture and heart rate among other things when consumers saw pictures of bowls of soup and different logos. These results led Campbell to change the size of their logo among other things.

One potential and very valid fear of most people regarding this technique is that marketers will now “be inside our brains”. If the information were to be misused it could be terrible, but for now it doesn’t seem as dangerous to people considering first and foremost that they can’t measure you if you don’t agree to it. The field is too new to judge and in any case it would be better for Washington to set the rules of the game in advance so they don’t need in the future to respond to a very preventable issue that definitely plays with the privacy of individuals.