The head of Groupon in the UK has rejected claims that major companies risk “trashing their brands” by working with the discount-deals site.
Groupon UK managing director Roy Blanga said: “Our model offers incremental sales to existing business – 50% of offers come from existing partners, so it is working for them.”
Blanga hit back after senior figures at two of the UK’s largest travel companies, British Airways and Tui Travel, dismissed Groupon.
BA UK head of sales Richard Tams said: “Evidence of repeat purchases through Groupon is appalling.”
Tui Travel specialist and activity sector managing director John Wimbleton said: “The danger with Groupon is you allow someone to trash your brand.”
Blanga said: “I understand BA does not see a reason to go with a company like ours, but our offers are limited and unannounced. “We target people who are not necessarily thinking of going, say, to Barcelona – so they think ‘if the price is right, why not?’
“We are not targeting people thinking of going away. That is fundamentally different to people targeting their own database.
Companies are not cannibalising their own sales. It is incremental to existing business.”
Blanga conceded: “The model could be brand damaging. You need to structure the offer right to make it work.” But he added: “You can’t go on Groupon and find a hotel. Promotions find you. It is not like a discount site.”
Groupon users sign up for daily offers according to where they live or work and subject areas such as food, beauty, travel and leisure.
Offers consist of discount vouchers on the price of a product or service. These may be for purchase on a set date or over a period, but the offers are available for just 24 hours.
Blanga said: “You need to limit [availability] because companies don’t want to affect their yield. “You can’t do promotions too frequently, and how offers are structured depends what people want from a promotion. [But] they can allow merchants to achieve a high volume of sales in a short period.”
The deals site developed in the US and launched in the UK in 2010. It set up Groupon Travel and launched Groupon Getaways last year.
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