Business Claims Westfield Groupon Deal Poses Risk to Retailers

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Australia’s leading online coupon website, i love coupons has recently stated that Westfield’s new partnership with Groupon could compromise Westfield retailers ability to offer consistent service as well as affect in-store product availability.

With deals that can be up to 90 per cent below normal retail price, upholding levels of service and meeting customer demand might become a real struggle.

Australia’s leading online coupon website, i love coupons has recently stated that Westfield’s new partnership with Groupon could compromise Westfield retailers ability to offer consistent service as well as affect in-store product availability.

i love coupons Director, Mr Louie Van Essen, claims that through a business model that often results in the generation of unmanageable customer levels, group buying sites like Groupon have been known to drive to small and medium businesses to bankruptcy as they’re unable to meet demand.

“The Groupon model’s success is dependent on selling the most deals. This model is based on preselling products and charging up to 50 per cent of any deal’s value, thus the more deals sold, the more income generated. Unfortunately by charging huge fees to lodge deals, such models tend to take advantage of retailers who are unaware of the numerous online promotional platforms and advertising mechanisms available to them at far less cost.

“Unbeknown to many retailers, by aligning with a group buying website like Groupon, they will be exposed to practices that might cause serious problems for their business. With deals that can be up to 90 per cent below normal retail price, upholding levels of service and meeting customer demand might become a real struggle. This might result in existing loyal customers who are disappointed and potential new customers who are unimpressed.

“The Westfield Groupon partnership poses a real risk for retailers and consumers alike,” said Mr Van Essen.

Retailers looking to drive more customers in-store without compromising on their ability to provide high-quality service are increasingly turning to online deal websites with alternative business models, like i love coupons. Regardless of the product or service on offer, sites like i love coupons allow businesses to create coupon solutions for free. And by controlling the number of deals sold, retailers can ensure the deals they offer match their businesses capacity.

Westfield has stated that its partnership with Groupon will help combat the retail slump being experienced by many bricks-and-mortar stores, by moving customers away from their laptops and back into shopping centres.

“This partnership demonstrates the increasing dependency bricks-and-mortar businesses have on promoting products and services online. Crucially though, it will also highlight how easy it is to use coupons to generate sales and encourage customers to purchase online at other retail stores,” said Mr Van Essen.

The Westfield virtual mall was launched in April 2011 to much fan-fare, however a recent study by Nielsen revealed the online mall still has much room for improvement ranking at number 13 of the top internet merchandise sites.

“It would be more beneficial for Westfield to generate stronger search engine optimisation, increase its partnerships with affiliate advertisers and review pricing structures to compete more effectively with online retailers.

“Further, rather than engaging the same audience every time, Westfield retailers need to be encouraged to expand their advertising into other coupon websites to make sure they’re reaching the broadest number of people possible,” said Mr Van Essen.

i love coupons offers a huge number of discounts across a large range of products and services catering to a variety of interests and demographics. For more information please visit i love coupons website.

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Lauren Zammit
Wrights
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