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The ailments faced by Groupon - where is it all going wrong for the discount deal giant?

Deal-of-the-day sites such as Groupon have certainly been making the headlines recently, but increasingly for less than positive reasons. This is a shame, as such mass coupon portals are providing a glimpse into the future, with the promise of time-sensitive and geographically specific offers pushed to consumers’ mobile phones.

New digital coupon technologies are exciting and compelling propositions, however the risks need to be understood and managed. There is certainly no justification for exposing consumers to questionable terms and conditions, for merchant offers to be cynically limited to minute volumes, or for misleading headline prices to be allowed. If this happens, then deal sites are failing to adequately look after the interests of subscribers.

Deal-of-the-day sites should also help merchants to plan their campaigns so that they meet objectives and are encouraged by the results to come back again in the future with more great offers.

It’s now time for this new sector of the industry to take a step back, slow down and catch its breath. The UK market still boasts some of the most sophisticated and successful coupon and voucher programmes in the world. But these kinds of promotions depend upon trust between the consumer, confident the offer will be honoured; the merchant, certain that they will recover the discount; and the coupon issuer, who expects to pay only for coupons that have been redeemed.

This trust is underpinned by intermediary agents, who ensure the system works for the benefit of all parties. These agents play a vital role in the success of the paper-based voucher system and their experience and expertise is also essential in the digital coupon environment.

Penny Dryden Commercial Director Valassis UK

14 Feb 2012 - 14:36