Groupon typically crowds users' email in-boxes with deals on massages and local restaurants, but this week, it dramatically upped the ante, offering members a discount on... a car! On Tuesday, Detroit Groupon users had the chance to buy a $199 coupon good for $500 off the purchase or lease of a new or used vehicle from LaFontaine Auto dealership. Should Groupon offer up more deals on big-ticket items, or stick to spas and spaghetti?
Cars aren't what Groupon customers want: Groupon's 80-million-plus users didn't sign up for cars, says Nicholas Jackson at The Atlantic. The company achieved its meteoric rise by offering clear-cut deals on eyebrow waxing and staples like groceries, not vague discounts on cars. If Groupon drifts away from offering deals that enough people can actually use, we're all likely to start deleting its emails. As for me, "I'll just sign up for Living Social, thanks."
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Plus, these deals aren't even that good: "This voucher is for a very small portion of the cost of a car or lease," says Harvard Business School associate professor Ben Edelman, as quoted by Reuters, so it's basically an agreement to buy or lease a car from LaFontaine," with little added value for customers. And when it comes time to negotiate, the dealer could simply hike the price in anticipation of the discount, making it worthless. With spa and restaurant deals, users know the original price, and it's clear how much they're saving.
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Maybe these deals will help differentiate Groupon: It would seem the company is trying to distinguish itself from its numerous competitors, says Graeme McMillan at TIME. Grand discounting has certainly gotten Groupon publicity, but it remains to be seen if the big-ticket items will just send customers to other sites where they can actually afford what's being offered. One thing's for sure, though: "As soon as someone starts offering 50 percent off transatlantic air fares, I'm there."
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And, arguably, customers are hungry for deals big and small: "It's exhilarating scoring a deal," and people are literally addicted to buying stuff on Groupon, says Nicole Fabian-Weber at The Stir. People buy Groupons for things they don't need, so why not a car? This "sounds like a pretty good deal — and sure beats the hell out of haggling with a salesman."
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