Social Commerce

Gap@Groupon | Commentary Roundup

The web is still digesting last week’s Gap social commerce promotion that generated $11m sales in one day. Hosted on the group buy Groupon platform, the “$25 for a $50 certificate” is one of the most successful social commerce events to date. Brilliant or barmy? Opinions are divided.

Here’s a summary of who’s saying what about the promotion that will allow social commerce agencies to adopt a new poster child for their cause – retiring the tired “Dell sold 7m on Twitter” claim…

Mashable: Groupon Smashes Sales Records with Nationwide Gap Deal. 441,ooo Groupons sold on one day promotion on 19 August – about 5% of the total 9.4M Groupons ever sold…  The Gap promotion was also promoted on Twitter’s EarlyBird deal feed.  Augustine Fou, chief digital officer at Omnicom, is cited as commenting on the promotion is a prime example of “when NOT to use Groupon”. He commented, “Groupon is great for restaurants who have the margin to do it and who need publicity because people are not aware, but not for a big brand like Gap. It is simply a waste of money for them.”  The majority of comments beg to differ – pointing out that Groupon has not revealed the cut it took from the promotion, and retailers regularly run 50%+ off promotions, and many customers will spend more than $50.

TechCrunch: Groupon Launches National Deal With Gap, Selling 10 Groupons A Second.  First time Groupon platform (b. 11 November 2008) has been used for a nationwide deal (US) for a major brand. Article questions the ROI of the deal – Groupon is valid until November 19, 2010. In comments a useful link – – from Dave Hoover to live Groupon sales activity.

ClickZ: How Gap’s ‘Groupon’ Went Crazy Viral: The success of the social commerce promotion wasn’t merely due to the lucrative discount offer. A marketing mix involving social media (Twitter Earlybird (180K+ followers) Twitter Gap (30K followers), Facebook Gap (606K “likers”) affiliates (Groupon’s 1,500 affiliates) and an ad on Digg supplemented Groupon’s e-mail program in the effort. Groupon spokesperson Julie Mossler challenged the well-reported idea that the huge response to the Gap deal caused Groupon’s system to crash. “Our servers never actually crashed,” Mossler said.  More commentary on the viability of deep discounting and the risk of eroding brand value.

Chicago Tribune: Gap’s Groupon pulls in $11 million: Promotion so successful Groupon servers had problems keeping up with demand.  First ever nationwide deal and a departure from typical Groupon local deals.  Groupon recently introduced a feature called personalized deals to target subscribers based on their gender and ZIP code, enabling the site to offer multiple promotions each day. These deals will eventually be aimed at consumers based on their Groupon buying history, similar to how e-commerce companies such as Amazon use recommendation technology to predict shoppers’ preferences.

CenterNetworks: Groupon Teaches You Why Coupons Are Better Than Checkins For Deals: why do coupons work better for Groupon than they ever will for Foursquare? 1) the deals and coupons can be used by anyone, 2) there is no requirement to load software, 3) no privacy concerns <– this might be the biggest hurdle, 4) merchants see NEW foot-traffic into their stores, 5) deal and coupon sites can help make the coupon a success while pushing a local-checkin promo is a much harder sell to deal hunters.  Foursquare should stick to rewarding loyalty not generating additional footfall.

Chartered psychologist specialising in consumer behaviour, wellbeing and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.