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"Deep discounting and coupons are counter-cyclical" Not if they're mostly (or even significantly) in discretionary categories and experiences, though. You coul
by jonnathanson 15y ago
"Deep discounting and coupons are counter-cyclical"
Not if they're mostly (or even significantly) in discretionary categories and experiences, though. You could offer me 90% off a tennis lesson, or 99% off a trial run of Invisalign braces, but if I'm struggling to make ends meet on the basics, such offers are of little use to me.
In fairness, I have no idea what percentage of Groupon's offers are discretionary. (Though, anecdotally, it sure seems like a big number). But my point is that I wouldn't put it past many analysts to assume that it's a significant percentage. And that's all you need to move the price of the stock.
- jcampbell1 15y agoI don't think the term "discretionary", captures what happens during a recession in the first world. I mean, when unemployment goes from 6% to 9%, 3% of the population stops going out for dinner, and 70% of the population cuts back on spending based on fear. That 70% of the population starts cutting coupons and buying generic products, and shops at Walmart instead of Whole Foods. Fashion industries get hit hard, but entertainment generally doesn't. I really think the "deals" or "coupon" space is counter-cyclical no matter whether the coupons are for skydiving or pickles. I personally don't have a gut instinct for this space, as I am not a customer of Groupon, but I am interested in the question "If you neighbor lost his job, would you buy more or less Groupons?".