The Retailer’s Risk To Social Couponing

Social Couponing Takes Over The World

With social couponing taking over the world, retailers and e-tailers of all sizes are jumping at the opportunity to reserve their space on the “coupon market”. While there are certainly some success stories tied to this new marketing venture, retailers should be aware of the risks involved as sheer volume is increasingly overshadowing actual ROI in the long run. Unless a retailer’s gross revenue represents a 400% mark up from cost, massively discounted product is at serious risk for causing a surge of red across the small-mid sized business books.  There are certain things to consider when developing a social couponing strategy, particularly, how you can mitigate loss by focusing your offer on products or services that benefit from repeat visits or add on’s, studying the response your competitors have received from a similar offer or consider a % off a flat rate that leaves the door open to more purchases.

From the consumer’s perspective, social couponing has changed the way we shop. Loyalty shmoyalty. I will personally never pay more than $30 for a high end hair cut, $25 for a man-pedi or seek out a professional service again. As consumers, we have come to expect the deal and we are willing to pay for it accordingly. We’ve also learned how to sniff out the bad ones, i.e. the ones that require an add-on or offer a limited service, so if that’s your angle as a retailer, you best make it extra special to be worth our while.

Advice to retailers? Know the break-even point of your offer and expect no loyalty. Just because everybody’s doing it doesn’t mean it makes sense to you and your business.