![]() ![]() Groupon confirmed the layoffs to TechCrunch after the publication of the story. The reduction impacted workers in teams including merchant development, sales, recruiting, engineering, product and marketing. Groupon's long term success relies on making sure that 1- the merchants it spends so much money selling to come back and buy again, and therefore that 2- Groupon deals work for merchants.Chicago-based Groupon today laid off more than 500 of its employees - 15% of its 3,416-person headcount - according to posts from former employees on social media. These salons are then caught in a deal-loop where they can’t escape Groupon!" They then have no choice but to go back to the well and run another Groupon deal just to ensure their survival. This phenomenon happens when a salon runs a very successful Groupon deal but spends so much time servicing it that they lose all their original clients. Even scarier: "an increasing number of smaller salons now survive solely on Groupon deals."Out of all our salons who have run a Groupon deal, only about 10% are either planning to (or have already) run a second campaign.".For Groupon to make sense financially, they have to convert 10% of coupon users to long-term customers, but only 1% of them convert. ![]() Groupon is about 50% of the deals run by merchants.The question is, is this generalizable for most Groupon merchants? So it has meaningful data about at least one specific sector: beauty salons in the UK and Ireland. "Whenever a salon in the UK or Ireland runs a deal with Groupon, it most likely ends up being processed by Phorest's software," Collins writes. He got that data from a friend who runs Phorest, which does booking software for beauty salons in the UK and Ireland. ![]()
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