Today, I have good news for you; it is called Groupon. This new business concept is revolutionizing the e-commerce marketplace. Groupon is making a lot of money by transforming the concept of benefiting from large scale sales into the new idea of collective buying power, isn’t that just genius? Whether you are a consumer, a merchant, or you are just looking around for a new advertising option, Groupon offers a great deal for you.
For the consumer, there is a daily deal to look up for. More than a coupon service, Groupon acts like a city guide negotiating discounts for a variety of products and services within well rated local businesses. Groupon not just offers you deals of your favorite activities, but it also gives you the opportunity to try new places and products.
If you are wondering how it works, well, it is really simple. First, consumers subscribe to Groupon to receive the deals. Groupon features a deal every day; the deal is available just for 24 hours. Then, consumers who are interested in the deal buy it. The key is how you get your deal. Groupon’s business is based on the idea of sharing and broadcasting the deals. Therefore, if a certain number of people buy the same deal you bought, you get your deal, otherwise no deal. Either way, it is risk free. If the deal is not settled, anything is lost, but if you get the deal, you just have saved you some money for something you want, so redeem it and enjoy it.
From the merchant perspective, Groupon’s value relied on its ability to deliver customers and brand exposure for their businesses. The idea is that when redeeming the coupon, customer end up spending more than just the coupon. Moreover, if a great experience is provided, customer will be likely to return and comment about it in social networks. What does it cost to businesses? There is not money upfront required, but businesses must commit to provide at least a 50% discount in the deal in order to be featured in Groupon. If there is no deal, Groupon is free for the business, no discount will be given and Groupon will still advertising it in its business newsletter.
For those of you who look a Groupon as an advertising platform, the deal is also on. Groupon is claiming to “keep consumers engaged in a way traditional marketing can’t match”. Groupon studies conclude that businesses were able to gain a big amount of customers and to increase their cash flows within days and without paying upfront. However, Groupon is not for every business. Business have to consider their ability to handle large number of costumers and most important their ability to afford a 50% cut in their products or services.
For me is definitely a deal…. What about you?
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