Groupon’s first foray into the auto industry has met slow demand, as shoppers proved more wary of snapping up bargains for expensive items, according to a new report.
Last week, the group-buying firm offered shoppers a $500 discount at a US car dealership, for just $199.
However, according to trade news magazine Auto News, only four consumers which have agreed to pay for the discount voucher on a new-vehicle purchase at LaFontaine dealer in Highland Michigan.
Groupon has now extended its offer from the original two days to four and considered lowering the number of consumers needed in an effort to turn things around.
However, the dealership did receive media calls and inquiries from other dealerships interested in Groupon promotions.
The dealership also sold new cars to two of the four Groupon customers, this way honoring the vouchers, even though Groupon is canceling the deal and refund the money.
Consumers were to pay Groupon $199 for a voucher worth $500 toward the purchase of a new car, redeemable through the end of 2011.
Half of the $199 would go to LaFontaine. LaFontaine capped the deal at 150 vouchers but needed to entice at least 10 customers during the two-day offer on July 12-13 for the promotion to go forward.
Groupon’s major impact so far has come from offering its more than 80 million members daily deals at local small-ticket retailers, spas and hotels. Often discounts are for 50% or 60% off.
Although this was not Groupon’s first meeting with the auto industry, the discount system was successfully used to promote service business.
Source: Auto News
