Groupon scored its first nationwide retailer Thursday morning with an offer from The Gap appearing on all 85 of its city-based websites in the U.S. and Canada.
"We're always looking at new and innovative ways to connect with our customers, and we know many of them are Groupon subscribers," Olivia Doyne, Gap director, engagement marketing, tells Marketing Daily."We thought the timing of our exclusive Groupon offer would be ideal as people begin to build their back-to-school and fall wardrobes."
The promotion, offering consumers $50 worth of goods for $25, was to expire at midnight Thursday and briefly crashed Groupon's servers. Frustrated consumers wrote on the Los Angeles discussion board that they were getting errors when they tried to go from the email blast to the Groupon website to purchase the deal. "We apologize for the technical issue," Groupon responded. "Due to the volume of activity on the site, some of the connections are timing out. Please keep trying!"
Despite the technical difficulties, a Groupon spokesperson said that as of 2 p.m. ET Thursday, the company had sold 250,000 Groupons, averaging roughly 10 per second. At that rate, the company is on track to sell more than 700,000 Gap Groupons for the day.
Groupon is in more than 230 markets in 29 countries, having just expanded to Japan and Russia this week. The Gap deal appeared in markets in the U.S. and Canada only. Customers can redeem the coupons at any U.S. or Canadian Gap, not just at Gaps in the cities where the Groupons appeared.
"Groupon is one of the many buzz / traffic-driving initiatives we're trying at Gap brand," Gap spokesperson Kris Marubio tells Marketing Daily. "This is an experiment and a good opportunity for us." Groupon's daily deal reaches 8 million prospective new customers in a single day, she adds.
"We know that our customers are online and it's important to connect with them where they are spending their time," Marubio says. "Groupon offers a fun, unique way to engage with our target customer. A majority of their site subscribers are women between the ages of 18-34, which aligns nicely with our target customer who is in 25-35 age range."
Twenty-five dollars off $50 is a deep cut to margins, especially since that doesn't include Groupon's cut, which is typically 50% but may be less considering the magnitude of the deal.
Not all customers were happy to see the ubiquitous deal. Rachel Delgado joined other customers in expressing reservations about the deal on Groupon's Los Angeles page. "I have to agree that while this is a good deal, I am also put off by the fact that it is the Groupon for every location today," Delgado wrote. "I would really much rather have seen it staggered at least in a regional fashion so that we could still get other deals. This is not something I would want to see in the future with other large corporations. It's like if I bought a magazine and the ad on every page was only for Gap."
Groupon has also featured Blockbuster, the NBA, Jamba Juice and Zipcar, but never in every U.S. city at the same time. Groupon has had other nationwide deals, but not a retailer. The site had a deal across all cities on May 30 for DonorsChoose.org. The online charity connects individuals with classrooms in need, allowing members of the general public to become philanthropists. The site on May 16 also featured a nationwide deal on the book written by Zappos.com CEO Tony Hsieh.