Rocky Agrawal has been relentlessly writing about the significant flaws in Groupon‘s business model, and the growing doubts about its credibility and viability. From my perspective it’s simple: Groupon isn’t making its partner merchants or its coupon users happy. I jumped on Groupon early — and I’ve enjoyed a few great deals — and a lot of mediocre ones. As an end-user, I’m increasingly bearing the brunt of the merchant’s unhappiness, and the daily deals are just feeling more and more like spam.
The Gilt Groupe remains privately-owned, so it’s escaped the intense regulatory and media scrutiny that is quickly exposing Groupon‘s naked greed. But their daily deals are also starting to feel like advertising spam, and the brands and the deals just aren’t as good as they once were. Today, Gilt has Docker’s Alpha Slim Khakis “on sale” for $78 — the same pants are on sale at Dockers for $59, with an additional 30% off and free shipping on orders over $100. No one markets to the luxury/value customer better than Gilt. But this is not the first time I’ve come across a Gilt “sale” with pricing that doesn’t add up to savings. Can they survive as online purveyors of luxury without delivering value?
Have you grown tired of flash-sales and coupon deals? Had one too many mediocre Groupon dinners where you were treated like a second-class customer? Tell me about it…..