Bad news for group buying from local daily deal aggregator and number-cruncher Yipit. Following on some earlier analysis based on the start-up’s S-1 filing, the initial paperwork required for an IPO, Yipit finds that Groupon’s numbers are getting worse with time. In Boston, the company’s second-oldest market, subscribers are buying fewer Groupons and revenue per merchant is waning, Yipit’s Vinicius Vicanti writes. As Groupon spends more to acquire new customers, its subscriber base is buying fewer Groupons. “That’s not good,” is Mr. Vicanti’s kicker.
Not good for Groupon, but also not good for Yipit and other start-ups tangent to the group buyosphere, which includes aggregators like Yipit and Dealery as well as start-ups like Citypockets, a daily deal organizer and second market. If customers get tired of buying Groupons–which we speculated they might, as customers realized getting value out of coupons takes work and the payoff is countercyclical to the economy–the bloated daily deal industry will considerably shrink.
One bright spot: instant coupons. With partnerships between services like Foursquare and Groupon, merchants can now leverage group buying economics to recruit new customers on the spot–a highly efficient mechanism for bringing thrifty, but lazy customers in exactly at slow times. The instant group buying shift may not help Citypockets, but it’s great for Yipit, which in addition to aggregating deals has branched out into providing competitive market research to the daily deal industry.
And the e-coupon craze is far from over. Betabeat just got a note yesterday from Coupons.com, “the leader in digital coupons,” which just received $200M in funding in June and is estimated to be worth $1 billion. And no one has really figured out the best way to capitalize on the demand for Seamless promo codes, which is raging. Or maybe that’s just us. Yipit?