31 May 2011

Our Society Is Doomed

Sharing Local Deals is now a common practice.

In my view this is a sad trend for the merchants and is unsustainable. Let me paint the basic picture for you.

1. Total consumer spending is relatively flat or even. IE there is not a huge stimulus for people to spend MORE money on these deals. Therefore the behaviour is to divert spending from one source to another
2. The new players Living Social and Groupon etc take a 50% commission from the deals.
3. The reduced price reduces profitability for the local merchants meaning that they must either pay their suppliers or their staff less or work harder to achieve the same standing in place result.

read the whole article on eMarketer and if you are a local vendor - now is the time to weep


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