Effects of Reputation on Daily Deal Promotions: Evidence from Groupon

Daily deals are nowadays very popular. As a new form of marketing, they allow local small businesses to sell vouchers at substantial price discounts for a very limited period of time. However, it is unclear whether and to what extent a seller’s online reputation affects the outcomes of its daily deal promotions. This paper presents an analysis of 4060 daily deals scraped from Groupon. The empirical results suggest that (1) business reputation, measured by displayed average rating, is positively associated with the sales of vouchers; (2) business reputation has no significant relationship with voucher discount depth; (3) business reputation is positively associated with the increase of customer traffic following a daily deal promotion; and (4) ratings displayed on daily deal sites are more influential than ratings displayed on third-party review sites. These findings extend our understanding of daily deals and provide concrete guidance to merchants regarding how to attract more purchases and traffic through online deals as well as to platform owners by pointing out the value of reputation in moderating consumers’ and merchants’ behaviors.

A Note on the Impact of Daily Deals on Local Retailers’ Online Reputation: Mediation Effects of the Consumer Experience

Practice- and Policy-Oriented Abstract

Deal or No Deal? Online Deals, Retailer Heterogeneity, and Brand Evaluations in a Competitive Environment

Daily deal platforms, such as Groupon, peaked in the mid-2000s, by letting retailers offer 50% promotions to consumers using an app. When used right, retailers were able to get consumers to try them for the first time and build a customer base. When used wrong, retailers lost revenue unnecessarily and sometimes went out of business. Even now, in 2020, you can find lovers and haters of daily deals, and yet they remain an integral part of the marketing mix for many retailers. One lingering question about these deals remained: How do customers perceive a retailer that offers daily deals before going to the retailer? Do retailers look desperate or confident? Through a series of laboratory experiments, we test whether offering a deal changes consumers’ preconsumption brand evaluations. Our research shows that brand evaluations are contingent on the retailer type (i.e., price segment and age), the success of the current deals offered (i.e., number of page visits and purchases), and the number of competitors that are also using deals. Together, our work demonstrates specific conditions where offering deals may lead to positive or negative consumer perceptions even before arriving at the retailer.

Information Transparency, Multihoming, and Platform Competition: A Natural Experiment in the Daily Deals Market

Platform competition is shaped by the likelihood of multihoming (i.e., complementors or consumers adopt more than one platform). To take advantage of multihoming, platform firms often attempt to motivate their rivals’ high-performing complementors to adopt their own platforms, or they attempt to prevent their current complementors or consumers from multihoming. In this paper, we study the effectiveness of such strategies in the context of the online daily deals market. We first develop a game-theoretical model that takes into account multihoming on both sides of the market and strategic behavior of all participants—consumers, platform firms, and merchants. We then derive hypotheses and empirically test them. The empirical analysis leverages a policy change of Groupon that reduced information transparency and weakened LivingSocial’s ability to identify popular Groupon deals and poach the corresponding merchants. Our results show that limiting information transparency reduced multihoming: after the policy change, LivingSocial copied fewer deals from Groupon and increased its efforts to source new deals. Consequently, industry-wide deal variety increased. We also observe a seesaw effect in that reduced merchant-side multihoming led to increased consumer-side multihoming, thereby strengthening LivingSocial’s market position on the consumer side. Overall, after accounting for changes in both lifetime value of the customer base and acquisition cost of merchants, Groupon’s policy change reduced LivingSocial’s profitability. This paper was accepted by Juanjuan Zhang, marketing.

Dynamic Resource Allocation on Multi-Category Two-Sided Platforms

Platform businesses are typically resource-intensive and must scale up their business quickly in the early stage to compete successfully against fast-emerging rivals. We study a critical question faced by such firms in the novel context of multicategory two-sided platforms: how to optimally make investment decisions across two sides, multiple categories, and different time periods to achieve fast and sustainable growth. We first develop a two-category two-period theoretical model and propose optimal resource allocation strategies that account for heterogeneous within-category direct and indirect network effects and cross-category interdependence. We find that the proposed strategy shares the spirit of the allocation rules for multiproduct nonplatform firms and single-product platform firms, yet it does not amount to a simple combination of the existing rules. Interestingly, the business model that platforms adopt crucially determines the optimal strategy. Platforms that charge by user should adopt a “reinforcing” rule for both within- and cross-category allocations by allocating more resources toward the stronger growth driver. Platforms that charge by transaction should also adopt the reinforcing rule for within-category allocation, but follow a “compensatory” rule for cross-category and intertemporal allocations by allocating more resources toward the weaker growth driver. We use data from the daily deals industry to empirically identify the network effects, propose alternative allocation strategies stemming from our theoretical findings, and use simulations to show the benefits of these strategies. For instance, we show that reallocating 10% of the average observed investment from Fitness to Beauty can increase profits by up to 15.5% for some cities. This paper was accepted by Matthew Shum, marketing.

Percepções dos trabalhadores do sistema penitenciário sobre suas atividades relacionadas à inclusão pelo trabalho de apenados em regime aberto / Perception of prison workers on their activities related to inclusion by the work of the prisoners in the open system sentence

Introdução: A literatura aponta diversas pesquisas envolvendo o sistema prisional, entretanto, são escassos aqueles que dão visibilidade às atividades dos profissionais que, cotidianamente, acompanham o processo de inclusão dos apenados no trabalho. Objetivo: Esse estudo teve como objetivo analisar a percepção dos trabalhadores do sistema prisional sobre suas atividades relacionadas a inclusão no trabalho de apenados em meio aberto. Metodologia: Trata-se de uma pesquisa exploratória, de abordagem qualitativa, que teve como participantes trabalhadores de uma instituição prisional que faz inclusão de apenados no trabalho no município do Rio de Janeiro. Sete entrevistas semiestruturadas foram realizadas e analisadas pelo método da análise de conteúdo. Resultados e Discussão: Os resultados desta pesquisa identificaram aspectos sobre o funcionamento da instituição, bem como do processo de identificação do apenado para ressocialização ainda no regime fechado e atividades incentivadoras a permanência no trabalho de egressos da penitenciária. Ademais, a pesquisa demonstrou que os trabalhadores entrevistados não tinham formação específica para trabalhar no contexto prisional, traços de precariedade nas condições de trabalho e desconhecimento da sociedade civil sobre a realidade explorada nesse estudo. Assim, embora o trabalho seja reconhecido como eixo para a inclusão social dos apenados, ainda existem barreiras nesse processo. Conclusão: Esta pesquisa deu visibilidade ao trabalho dos profissionais que desempenham papel singular no sistema prisional. Espera-se que as informações levantadas sejam úteis para que formuladores de políticas públicas possam aprimorar a atividade desses trabalhadores. Sugere-se que outras pesquisas sejam realizadas visando engendrar soluções para as dificuldades enfrentadas pelos trabalhadores. AbstractThere are several investigations about the prison system and its actors. However, few papers addresses the activities of the professionals that daily deals with the process of inclusion of the prisoners in work. Objective: To analyze the perception of prison workers on their activities related to inclusion by the work of the prisoners in the open system sentence. Methods: It is qualitative research that had as participants the workers of a prison institution that realize the inclusion in the work of prisoners in the city of Rio de Janeiro. The seven interviews were analyzed by the content analysis method. Results and discussion: This research identified aspects about the functioning of the institution, issues about the process of identification of the person for resocialization, still in the closed regime and activities to promote the permanence in working outside the prison. Besides, the research showed that the interviewed workers did not have specific training to strive in the prison context, traces of precarious working conditions, and lack of knowledge of civil society about this reality. Thus, although work is recognized as the axis for the social inclusion of the convicted, there are barriers in this process. Conclusions: This study gave visibility to the work of professionals who play a unique role in the prison system. It is expected that the information gathered can be useful for policymakers to improve the activity of these workers. It is suggested that further research could aim to generate solutions to the difficulties faced by workers.Keywords: Social Control, Prisons, Employment; Occupational therapy.ResumenHay varias investigaciones sobre el sistema penitenciario y sus actores. Sin embargo, ninguno de ellos dio visibilidad a las actividades de los profesionales que diariamente siguen el proceso de inclusión de los reclusos en el trabajo. Objetivo: Para reducir esta brecha este estudio analizó la percepción de los trabajadores de prisiones sobre sus actividades relacionadas con la inclusión de los detenidos bajo la sentencia de regímen abierto. Metodología: Es una investigación cualitativa que tuvo como sujeto a los trabajadores de un cárcel que promueve la inclusión social a través del trabajo de los detenidos en la Ciudad de Rio de Janeiro. Las siete entrevistas fueron analizadas por el método de análisis de contenido. Resultados y discusión: Los resultados de esta investigación identificaron los aspectos sobre el funcionamiento del cárcel, cuestiones sobre el proceso de identificación de la persona para el proceso de resocialización aún en régimen cerrado y actividades para incentivar la estancia en el trabajo fuera del cárcel. Además, la investigación apuntó que los trabajadores entrevistados no tenían capacitación específica para trabajar en el contexto de la prisión, rastros de condiciones de trabajo precarias y falta de conocimiento de la sociedad civil sobre la realidad explorada en este estudio. Por lo tanto, aunque el trabajo es reconocido como el eje para la inclusión social de las víctimas, existen barreras en este proceso. Conclusión: Esta investigación dio visibilidad al trabajo de profesionales que juegan un papel singular en el sistema penitenciario. Se espera que la información recopilada sea útil para los responsables políticos para mejorar la actividad de estos trabajadores. Se sugiere que se realicen más investigaciones con el objetivo de generar soluciones a las dificultades que enfrentan los trabajadores.Palabras clave: Control Social, Cárcel, Empleo, Terapia ocupacional.

A business model approach towards the understanding of daily deals within Internet distribution systems

The business model (BM) approach is making a slow, yet steady footprint in tourism research, can offer a fresh perspective and a viable level of analysis for broader networks of Internet distribution systems (IDSs). To date, the researchers have devoted limited attention to studying the daily deal (DD) providers and their position next to the online travel agencies (OTAs). More importantly, the DD providers developed a unique BM characteristics, which contrary to early predictions, enabled them to proliferate post-recession and maintain their position. The current study uses the BM approach to observe the original dimensions and BM elements, to identify distinct characteristics of generic and niche DD providers, and to benchmark them against the established OTAs. The BM approach enhances the understanding of the overlooked niche DD providers within IDSs. Further, this article provides a comparison of the BM characteristics in IDSs to help facilitate the formulation of a unique value proposition for each of them. Ultimately, the authors acknowledge limited possibilities for cooperation between the providers and discuss future directions of DD and broader IDSs BM transformations.