Since getting introduced to Groupon, My City Deal (www.groupon.co.uk) I must admit I have become a little obsessed. The website which was originally started in Nov 2008 in Chicago has grown to become one the largest deal of the day groups in the world and offers up to 90% off different city deals every day. Previous Groupons have included hotel stays, teeth whitening, sports and theatrical events, and a variety of bars and restaurants.
One of the things I couldn’t understand is the commercial aspect as some of the deals have the full 90% off, how is this commercially viable? After some research I found that collective or group buying allows for direct cost savings, both for the consumer as well as the business. Consumers will reap the benefits of discounted prices for restaurants, spas, hotels, etc, while organisations can save money by directly reaching target markets. The concept for this is simple organisations pool their buying requirements to obtain sizeable discounts from suppliers, resulting in cost savings that we the consumer see. Participating members further benefit through "networking opportunities and shared knowledge” which over time can build a tipping point of group purchasing power based on a growing number of active participants. Groupon is also planning to work with social media giant Twitter to allow users to receive "earlybird" notifications of deals thus making the company’s marketing campaign and group buying power even stronger For me as a consumer the fact that the site is really easy to use, emails me every day and has up to 90% off the type of things I would usually pay full price for makes the need for me to check the ‘deal of the day’ my highest priority on a morning. It almost feels like Christmas when I see something I want which is usually even before I get out of bed! Maybe im just a little obsessed but I’m hearing around the office that I’m not the only one.