Are Groupon and Living Social in a race to the bottom?
Both coupon services are trying to attract new users with better deals from bigger retailers. Does this create a classic race to the bottom? Groupon and Living Social are in a war and glutting the market with better and better offers. With everyone rushing in are Groupon and Living Social going to run out of people who want to buy coupons? From a business stand point that could be a real problem.
Both Groupon and Living Social advertised during the super bowl. First Groupon reserved a spot during the big game. Then Living Social was a last minute addition for the pregame. The rivalry is turning into a full fledged Pepsi vs. Coke war. Both are cutting their margins to become the bigger player in the space. Eventually someone will win after the other goes out of business. Who will be left and what will they look like? This reminds me of
http://www.letsbuyit.com/ in the 1990's and Value America that offered items at a discount. Both had slightly different business models but the mentality was the same. Unfortunately, neither business really took off. And that was without stiff completion.
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