As you might already know, we usually don't publish Daily Golden Nuggets unless we have enough data to substantiate what we're saying. Although recently we've published a few "Front Line SEO" nuggets that were based on developing SEO observations, we felt they were important enough to talk about.
Today we'd like to finally examine Groupon. Is it worth it for a retail jeweler? What's the typical result? How can you make it work for you?
Groupon recently filed for their S-1 and is moving forward with their IPO as soon as possible. They've had an amazing success in only 30 months, but is their business model actually a success for the retail stores that use it?
We've spoken to a few jewelers that have used Groupon and to many other retail business owners outside the jewelry industry. They've all reported the same experience: one time sales with little or no return.
Even though these first hand reports were all bad, we're more likely to believe that the retailers didn't understand the type of marketing they were buying into and were not properly prepared.
Here's what we know for sure:
1. A typical Groupon user is looking at the local daily deals on their cell phones, in email, and on groupon.com.
2. A typical coupon-clipping customer that might be incented to take advantage of your deal is a customer you otherwise would never have targeted.
3. Groupon can generate more than 1000 visitors to your website during the 3 or 4 days of the offer.
4. You need to have an up-sell offer in place otherwise you may never see that Groupon one-time customer again.
The Groupon concept is to offer huge discounts that would otherwise never be part of your normal marketing. Unfortunately for luxury items that you sell, this means you attract the customers that would otherwise not be able to afford to even look in your window.
If you decide to try Groupon, you should not offer a deal on fine jewelry, but rather something that would still be within the purchase budget of the same customers if they really wanted to spend money. Fortunately there are many types of jewelry available now that could qualify. Stainless Steel and Silver are very popular but don't forget about fashionable choices that use beads, various stones, wood and leather.
These are all wise choices without the worry that you are selling fine jewelry near cost just to attract customers. Again, those customers probably won't come back without an up-sell offer. If the bulk of your customers are tourists you absolutely need to up-sell them a different item because you're never going to see them again.
What is this up-sell we're suggesting? As an example let's say you offer a Groupon for men's stainless steel jewelry. The offer is compelling and droves of men, wives, sons and girlfriends come flocking to your store (after all, Father's day is this weekend). Once the person comes in the store, you present them with a different, perhaps more attractive set of steel jewelry that costs you the same, but the customer needs to pay a little more. It's their option to take original choice #1 or pay more for #2.
However that strategy still doesn't guarantee the customer will ever return. Something must compel them and what better than another deal? Remember these are deal seekers so think about offering something that otherwise would never make sense.
Here are some random ideas:
* Sell gift cards for half off the face value.
* Sell a "$500 off an engagement ring" certificate for $100.
* Offer 30% off a future engagement ring purchase if they buy the jewelry you are trying to up-sell them.
* Offer 30% off a future jewelry purchase that is only valid during the holiday season, February or some other date-centric time of the year.
Don't simply give away your store. If they want to benefit of a future discount they need to take the up-sell, or pay for a future discount. If paying for a future discount seems strange remember that the Groupon deal is just that. They pay money up front and then you've given the permission to redeem the deal within the next 60 days.
We've covered a lot of ideas. Groupon could work for you if done correctly. And don't forget the 1000+ people who will hit your website during the Groupon offer days. If you've been following our ideas on website usability, copy writing, color usage, et. al. for the past 230 nuggets then you should know already that 1000+ visitors to your website is a goldmine. Go read our previous Nuggets if you are just starting out. One hint though: if Groupon users are using a cell phone then you surely need a mobile website.
If you have Groupon stories to share, please post them here!