10 Aug 2012

Couponing the Bullet

By Marci Cohen

Despite the new obsession some people have with couponing, I learned the ins and outs of stretching my budget the old fashioned way – from my Grandmother.

My Grandmother read the Sunday advertisements religiously. She clipped coupons, compared prices, mapped out her weekly shopping strategy, and she taught me to do the same. Although life sometimes interferes with my ability to follow through with a weekly shopping plan, I stir up sweet memories when I get a bargain that would have made my Grandmother proud.

But things have changed. A lot.

While traditional couponing still exists (at least for the time being), my Grandmother wouldn’t recognize the discounts available today. Delivered to our inboxes daily are offers from countless daily deal sites. Looking for a new pizza place? There’s a deal for that. Interested in trying laser hair removal? There’s a deal for that too. Maybe you’d like to take a late summer family vacation? Don’t book it yet. There will certainly be a deal for that soon too.

Most shockingly, I recently came across a coupon that promised its audience the ability to hit their “targets” with not one, but two bullet vibrators at just $19. Perhaps this site offered its customers a discrete way to purchase a personal product, but the discount was the icing on the cake.

I will admit that I do subscribe to several of these daily deal sites, and part of my morning routine is to see what offers come across my inbox. I’ve bought a lot of deals, and although I’ve used most of them, some have been forgotten and gone to waste. I can hear my Grandmother scolding me for making this mistake more than once! I’m much more savvy about my purchases these days. I’m not so often lured by the appeal of a deal that I’m unlikely to use.

But how does this strategy work out on the other end of the stick? For the businesses, I’m betting it might be bittersweet at best. Think about the restaurant industry. Suppose a restaurant signs to offer a 50% off deal. With the cost of food and service, in addition to the cost that goes directly to the promoter, the restaurant might only walk home with a marginal profit. To top it off, it’s common that customers forget that a proper tip would cover the full price of a meal, even after enjoying a discount. So, unless the deals are carefully constructed, the servers often lose out too. Restaurants are most likely signing onto these deals in hopes of the golden pot at the end of the rainbow. Meanwhile, their servers might be looking for a new job at the higher-end-no-deal-site-kinda joints.

If the restaurant is really a special and unique place, it might be likely to get repeat visits after deal seekers exchange their coupons. But for those restaurants that are more run of the mill, these deals probably don’t work out so well. Think about it. Wouldn’t you look for the next new deal rather than become a repeat customer at an average restaurant? How many people do you know who only go out to eat on ScoutMob? I definitely know more than a few.

So, what does this new couponing phenomenon mean for the restaurant industry – survival of the fittest? It certainly means that quality and caliber will improve as the industry gets tougher and tighter.

The daily deal phenomenon is a complicated one. The deals have a way of working themselves out, but it will be interesting to see how they will drive our future. What is certain is that the phenomenon is here to stay for at least a while. When we thought there were enough dealers in the businesses, Google jumped onboard despite the fact that they almost purchased Groupon just about six months prior. I will withhold any comments about that for now.

What would my Grandmother think? I’m not so sure, but my guess is that she would advise me to tame my impulses and stick to her old faithful strategy. Don’t get tied up in the “buy me today!” strategy. A deal is not always all it’s dressed up to be. But if we’re talking about a freebie like ScoutMob, I’m sure she’d be all over it provided one little piece of feedback — “Nothing in life is free.”

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