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How To Increase Sales with Groupon

(Filed Under retail Lingerie News). BODY Magazine’s Ted Vayos spoke with Groupon B2B PR specialist Chad Nason about the company’s business model and involvement with the intimate apparel industry.

Ted Vayos: How can Groupon help intimate apparel retailers?

Chad Nason: Groupon connects retailers with customers who are interested in purchasing their products. Millions of Groupon customers surf our website or emails everyday looking for special deals on products and experiences. If interested, these customers purchase the deal through Groupon which can redeem within a set period of time. This period can vary from six to nine to twelve months and so on. While there may be a small percentage that never are redeemed, both Groupon and our merchants want every Groupon to be used so customers have the chance to experience a new retailer or local business, have a great experience and hopefully return in the future.

Ted: How did it begin?

Chad: Groupon began in November of 2008 and grew out of a collective action website called The Point. Groupon was created to get people out of their homes and into their local communities, shopping, enjoying restaurants, stores, spas, golfing and many other activities. It has since grown substantially. Today, Groupon has over 7,000 employees worldwide. It has become the most powerful marketing tool that local commerce has seen in many years. Groupon can be an incredibly powerful tool when used correctly.

Ted: What is the biggest mistakes retailers can make when using your service?

Chad: Retailers must make sure that their business is operating properly and that they’re able to fulfill all the orders that our service will bring to their companies. You only get one shot with new consumers to make a great impression; if they have a bad experience, a retailer will gain little or nothing from the transaction. Retailers need to take full advantage of new Groupon customers coming to their website or place of business. While they may be using their Groupons for a particular product or service, retailers have a great opportunity to show these new customers other products that are available.   

Ted: Groupon customers purchase these coupons from Groupon ahead of time. What happens if the vendor cannot ship the order?

Chad: It’s important that Groupon customers feel protected and trust our service. Groupon has what’s called the Groupon Promise which states that if a customer feels that Groupon let them down, they can call and we will return their purchase.

Ted: How does a deal work?

Chad: The merchant works with a sales representative at Groupon and they decide what products or discount they will offer  on Groupon. Another item that needs to be agreed upon is the tipping point. The tipping point is the minimum number of people that need to buy the deal through for the deal to become active for everyone. This ensures that the merchant will get a minimum amount of customers and make it worth it for them. If not enough people purchase the deal, then no one gets charged. There is also always the option for a cap. We guarantee to give Groupon customers their money back if they are unsatisfied and want to make sure that the retailer can handle this business, so, if needed, we try set a cap so that each business will be able to handle the amount of new customers while maintaining strong customer service.

Ted: Are you working with retailers in the intimate apparel industry?

Chad: We have worked with many lingerie retailers, like Taboo Lingerie in Austin, Tex.; Sexy Secrets in Miami; Bloom Lingerie in Boston; XOXO in San Diego; Chelsea Manor in L.A.; TLC Lingerie in Billings, Mont. and many others. Groupon has also worked with national retailers such as Nordstrom Rack and Gap.

Ted: How does Groupon get paid?

Chad: Businesses never pay us directly. We take a portion of the purchase price from each one of the Groupons sold.

Ted: What is the typical fee?

Chad: This is usually half of the value of the Groupon. This is negotiated between Groupon and the retailer earlier.

Ted: When does the retailer see their portion of the money from the Groupon coupon?

Chad: It is paid in thirds to the client. The first payment is sent the day after the the Groupon deal ends, the second is sent 30 days after and the final payment is sent 60 days after the deal.

Ted: Do companies make money from these coupon sales?

Chad: Groupon should be looked at as a marketing tool, albeit a much more effective one than print ads, television and online pay-per-clicks. For the lingerie stores, it will introduce them to consumers in their local markets looking to purchase their products. The long benefits are realized when merchants provide a great customer experience and encourage new customers to come back again and pay full price. Many Groupon merchants also see that Groupon customers spend well above the value of the Groupon, offsetting the discount they provide. The smart merchant will also try and capture personal information at the point of sale and use it for future marketing efforts. 

more retail Lingerie News >>

Published 07-06-2011 by Katherine Rautenberg

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