Groupon takes a cut of each groupon sold - up to 50% of the coupon value. Most retailers (excluding high-end luxury retailers) achieve gross margins between 20 - 30%. They are high variable cost businesses for which consistent use of Groupon may not be sustainable.
Gap and Old Navy have done some national deals with Groupon of course. But these national players, by virtue of their size, have more leverage with Groupon, and probably don't have to shell out the full 50%. And, I would argue, that these are meant as infrequent awareness-driving promotions that the Gap won't frequently do.
The greater a businesses' reliance on variable costs, the more risk they incur with a Groupon. Sure it's an enormous vehicle to drive traffic and trial - but promotions don't always translate into loyal customers. It could just be a one time bump where the retailer effectively gives money away. Unless, of course, the business is such that its resources are idle when there's no customers coming through the door. That is, they have a lot of high fixed costs with low marginal costs.
Think of restaurants, spas and gyms. They have to manage capacity and spend to operate at 100% utilization, even if they are seeing only half of that. If they use Groupon to fill those empty seats at 50% less revenue, that is actually better than making no money at all.
Now, Groupon appears to be making a play for loyalty cards and helping to manage some of the promotional aspects of a grocer's existing loyalty program. If it can scale this capability, this is great news for Groupon. It gives them another offering that allows them to appeal to traditional retailers whose high variable cost structure may not allow them to normally do a deal (or do deals as frequently) on Groupon.
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