Is Groupon Killing Local Boutiques?
“Groupon is my dentist.” This is what Wharton marketing professor Jonah Berger once overheard a woman say. She doesn’t have a regular dentist; she just notes whenever one offers a sale on Groupon—the discount site that sends sale notices for select items and services to about 142.9 million inboxes daily—and goes there. Sound extreme? Perhaps. But according to Berger, it’s an example of how the compulsion to save is changing all the old retail rules. With the plethora of discount sites hawking deals on everything from shoes to, well, teeth cleaning, we wondered: Is customer loyalty—and paying full price—a thing of the past?
While many local boutiques have found that their customers still come to them for the touches a small shop can offer—personal service, a staff who knows them, their preferences and fit—they also say they literally can’t afford to forget that shoppers have more options for where and how to buy than ever before.
Maureen Doron, owner of high-end Bryn Mawr clothing boutique Skirt, has pumped up her customer appreciation to thank her shoppers for sticking with her at a time when sites like Groupon, LivingSocial, Gilt Groupe and Rue La La (which launched a Philly arm last year) are dangling shiny, sparkly discounted carrots before them every day. Two years ago, she began sending out $50 gift cards for shoppers to use when they spend $250. And though she’d never previously discounted items in-season, she recently started hosting pop-up sales during which she offers, say, 30 percent off all bags. “I want them to know that I know I wouldn’t be surviving without them,” she says.
Andrea Chila, owner of Washington Square’s Pileggi Boutique, says that though her customers will pay full price (they want to buy whatever’s new), gradually lowering her prices has made a difference when it comes to staying on shoppers’ rotations amid all the red tags. “If I keep my price point around $150 to $250,” she says, “then people don’t have a problem with things not constantly being on sale or paying full price for a new dress or bag.”
So, deal-hunters, a word to the wise: Don’t forget about the brick-and-mortars. There will come a time when you’ll need a new party outfit, and if Groupon’s only pushing dentists that day, chances are there’s a neighborhood boutique that’s got your size.
This piece originally appeared in the January 2012 issue of Philadelphia magazine.
