Who did Groupon and FTD think they were fooling?

Posted: February 12, 2011 in Business, Marketing, Misleadership
Tags: , , ,

Question: When is a 50% off sale not really a bargain?

Answer: When a company has jacked up their prices first.

In the days before the internet and smartphones that let you scan a bar code and get competitive prices instantly, it was common practice to jack up prices before putting them on sale. Customers who didn’t do their homework (and this kind of homework was much harder back then) would think they were getting a deal, when they really weren’t.

Even today, this practice is widespread enough that Bob’s Discount Furniture has cut a swath through the discount retail furniture business by offering everyday low prices and comparing themselves to the trumped up sale prices at their competitors.

But this latest scam by FTD combines 21st century tech with 20th century chicanery.

If you haven’t heard, FTD offered Groupon users a $20 Off Coupon for Valentines’s Day flowers. According to CNN Money, nearly 3,300 users signed up for the deal. Sounds good, right? Sure, except that it turns out that FTD sent these Groupon users to a separate landing page with prices that were higher than their regular prices. The high service and shipping charges depleted the savings further, so the claimed 50% off was virtually negated. And to add insult to injury, the flowers wouldn’t even be delivered until after Valentines Day.

Groupon cancelled the offer and FTD has already taken down the offending landing page.

Now I’m not a big fan of Groupon to begin with, at least from the marketing side of the equation. I’m sure there are bargains to be had for shoppers, but the jury is still out as to whether companies that use Groupon are making any money. There have been many successful Groupon campaigns, but the abrupt and often unmanageable influx of business, frequently by Groupon members who rarely if ever convert into loyal customers for the retailer, combined with the cost of the promotion and rev share with Groupon, often leads to failure. Some Groupon retailers are getting burned, like Posies Bakery & Cafe who blogged about their negative Groupon experience back in September. Or Gregg Gibbs, whose Chicago Bagel Authority netted $15,000 for $80,000 worth of food, according to this article in the Chicago Tribune.

But regardless of whether you like Groupon or not, FTD is the real culprit here. According to TechCrunch, the coupon only worked if you went through the Groupon link. Going to the regular FTD site landed you on a page where the $50 Groupon flowers were sold for $40. So FTD knew what they were doing. They deliberately increased the price shown to Groupon members. And they charged a service fee.

Can you imagine the marketing meeting where FTD discussed this plan? What were they thinking? Didn’t anybody at the meeting point out that if at any point anybody went to FTD via any path other than the Groupon link, they’d see a different, cheaper offer?

Can someone please explain to me why FTD thinks their customers are cyber-savvy enough to use Groupon, but too stupid to spend a couple of seconds clicking around to check out the actual value of the deal?

Comments
  1. Josef Katz says:

    Wow. Just one more reason I don’t use FTD. I think their prices are inflated on a good day. With the internet it is pretty easy to find a local florist who will take your order for less.

    • jlsimons says:

      Yeah, we’re 1-800 Flowers folks ourselves. Easy, good value. Never feel ripped off, even when we compare with other .com florists. Of course, for Valentine’s Day, I hand pick them myself. From a special, hidden bower I maintain all year long just to pick the most perfect possible blossoms for my wife and daughter, guarded by unicorns that allow only me to enter.

  2. A Fan says:

    Fifty or so years, when I was a new bride, my father-in-law told me, “Learn your prices so you’ll know when a sale is really a sale.” I guess nothing’s changed, technology notwithstandng.

    • jlsimons says:

      Well, it is easier to find out the real prices now. Remember how incredible it was when Consumer Reports started publishing the real prices of things? Like Cars? It truly empowered the consumer.

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