Group buying, a new way of life for the empowered consumer
Today's consumers are more empowered than ever before. Many case studies show they have the power to make or break our brands. The question is: how should we deal with the empowered consumer?
A relative new concept that leverages this reality is called ‘group buying’. The idea is simple: consumers can ‘group together’ in order to get better deals/ discounts on products or services they like. Via so called ‘group buying sites’ companies can offer a limited deal to consumers. If enough people subscribe for it they get the deal. If not the deal is off.
At this stage, big players in the market include Groupon, LivingSocial & BuyWithMe. But there are many more come, as the market is growing very fast.
The strength of the ‘group buying’ – concept is that people are activated to find friends who are willing to subscribe to the deal, hence driving spontaneous word of mouth for the brand and the product/service in case. The incentive of getting a great deal creates a huge viral effect within their network. Basically, group buying sites use the power of social media to start natural marketing movements.
Benz recently experimented with the concept of group buying. They launched a campaign with 200 Smart cars on the Chinese group buying site Taobao, offering a 23% discount on the original price. They expected to sell these cars in 3 weeks. Instead, all 200 cars were sold in just three and a half hours, attracting over 300,000 visitors!
According to Mashable, group buying is changing the retail game. One thing is for sure, it’s already getting lots of business attention. Groupon is currenlty valued over $1.3 billion.
What are your thoughts on the group buying trend?