Are you living social or getting your groupon?

23 Mar

What’s the latest trend to do online with your friends?

GET YOUR GROUPON!!!

Groupon began just over 2 years ago in November 2008 and in that short time, it has grown an empire. In just 16 short months, Groupon was estimated to be worth $1 million. Only second to YouTube which reached $1 million in just 12 months!

For anyone not familiar with Groupon’s business model, here’s my short synopsis- Each day there is a daily deal. A certain amount of people must agree to buy the deal before the deal is “tipped” and then you are able to buy it. So in other words a group of people all want the deal in order for anyone to buy the coupon. The deals began as coupons for local businesses but has expanded to feature national companies as well. Groupon is currently in over 500 markets in 44 countries worldwide.

You may wonder why a business would want to be featured on Groupon. The businesses featured usually have a rapid rise in customers from the sales of the Groupon usually resulting in hundreds to thousands of customers. 97% of businesses featured say they want to be featured again. Visit GrouponWorks to view some great videos about the impact of Groupon.

See the below graphic for a more detailed history of Groupon.

The Amazing Rise of Groupon
[Source: OnlineMBA.com]

Groupon created a new and unique concept of online marketing but their biggest downfall is that it is easily replicated. Groupon’s success has spurred a multitude of look-alike sites including one of their largest competitors, LivingSocial. Others include Urban Dealight, BuyWithMe.com, DoozyofaDeal.comTippr, TownFav.com,  LocalTwist and DealStork.com .

There are even specific topic group buying sites popping up. I found one last week that only features deals on gluten free food, Gluten Free Deals . (As someone who has to eat gluten free, I was really excited!!!)

Google recently offered Groupon $6 billion for a buyout which was turned down by Groupon. Smart decision? Google’s not giving up that easily. Google is now reportedly testing their own group coupon site called Google Offers. You can read more about it from Mashable who broke the news in January. With Google’s already massive following, brand recognition and vast resources, this could a powerful competition.

So what’s next?

The idea of collective buying has taken off.

Wal-Mart launched a facebook app late last year called CrowdSaver. CrowdSaver features a product from Wal-Mart and once a set number of fans “like” the product, the product will then drop in price for everyone. The product will be available at the CrowdSaver price until the item sells out online. Read more from the Chicago Tribune.

I think we’ll be seeing more of these spin-off type promotions due to the influence of Groupon. As a result of the connectivity of social media, it seems it’s no longer how a business advertises to their online audience but how to get the online audience to market to their friends and continue the cycle.

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One Response to “Are you living social or getting your groupon?”

  1. digitalprairie March 30, 2011 at 5:27 pm #

    I had my first Groupon experience last year when I was on a trip to Atlanta. I ended up purchasing tickets to the Metropolitan Cooking & Entertainment Expo (which included a demonstration by Paula Deen) for very cheap. When my husband and I arrived at the event, there was a separate section for Groupon ticket holders set up (just as large as the regular ticket section)which definitely surprised me. I had no idea (at the time) the Groupon market was so large!

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