Collective Buying Power
I’m obsessed with Groupon. As a member of the generation dubbed “Millennials” I find myself deeply entrenched in the modern cultural movements revolving around social media, local consumption, social activities and frugality. I appreciate direct communication with those in charge, and have a slightly impatient streak. Groupon speaks to all of these elements of the generation by creating a discount-based marketplace for local businesses in major city centers across the US.
Groupon, launched in November 2008 as a way for members of a community to connect with great offers from businesses in their city. Each day, a business offers their product or service at a discount rate on the site, and as long as the required number of people sign up for the deal (by providing credit card info), everyone gets it. If it does not reach the person quota by midnight, no one gets the discount. The goal is that you, as a consumer who wants a product, will tell all of your similarly-minded friends so that you will all sign up and everyone wins. You can follow Groupon on Twitter, Facebook, or RSS. The range of products and services the company has provided so far is diverse, including items like groceries from an Amish market, wine classes, golf lessons and custom ceramics.
Unlike other sites similar to it, Groupon has a social media component which makes it doubly appealing. The message board on the right side of the website allows users to ask the company and each other questions about the fine print of the coupons, the services it covers, the products themselves, etc. Groupon staff all respond to these questions and comments, as do the vendors who are offering up their wares. If you liked bargain-hunting with your friends on the weekends, Groupon is your essential social network sale bin.
Groupon is currently doing business in 23 cities nationwide, and is looking to expand into Europe. And while it seems to be on an upward track, I can see a few possible pitfalls in its path if it doesn’t scale well. If it continues to grow, the time and energy required to respond to all questions from users may become overwhelming for both the participating business and Groupon. Also, what happens when 2,000 people buy a discounted massage from the local spa? If the volume of people who purchase these coupons can’t be accommodated by the business participants, users may start to become disenchanted with the service.
In addition, the products and services are skewed towards non-essential items for the affluent, such as Pilates classes or $7 sandwiches, which may limit the site’s appeal to folks with considerable disposable income. But Groupon is counting on the fact that everybody loves a good deal, and even those with less to spend will want to treat themselves every once in a while.
As for me, I’m following Groupon on Twitter to make sure I don’t miss out on a particularly fantastic offer, and I’m checking the site daily for the “Today’s Side Deal” section, for even more collective savings.
[Via London Times]
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