Half off – Half Full or Half Empty

Today, Adweek reports that Groupon‘s CEO, Andrew Mason, has told stockholders that “everything’s OK”.

I don’t think so.

Groupon does not have anything very unique in the 50% off world, anymore.  Everybody and his brother is getting in on the game.  Unless the deals get better – significantly below the half off level – they will have more and more competion, which will dilute the market and spread their wealth.

While they hit the ball first, they are not unique enough in their offers to continue to dominate the market.  Consumers are fickle; the best deal is still the best deal and they really have no loyalty to this company.  Finally, a lot of retailers are coming to the realization that they are not reaping a lot of repeat customers at “full price” after the deals are used up; read – Burger Wars of the 70’s.  It took that industry a long time to get out of the “Free Food” mess.

The stock went up after Mr. Mason’s four-page apology – better sell.