Over the past 1-2 years group buying has absolutely taken off. While Groupon started the mainstream trend, many other companies such as LivingSocial and BuyWithMe, have sprung up across the country and in specific regions and/or cities.
While a decade ago group buying was often limited to farm stands and fresh produce, these sites have the potential to change consumer behavior and is a major win for individually owned businesses – which now have an easy avenue to attract hundreds or thousands of new customers. Depending on what restaurants offer deals, people going out for dinner will modify their plans to obtain a 50 percent discount on their meals – especially considering some very nice restaurants are participating in group buying. The same goes with other types of businesses.
For consumers, group buying is an avenue to try some place new for half the price (most of the time). Or, if it’s a personal favorite, they can get a discount next time they are at the store.
Just recently the Isabella Stewart Gardner Museum in Boston offered $6 for admission (down from $12) on Groupon. Over 9,000 people purchased this deal, which brought in nearly $55,000 dollars within a couple days. Then there are activities people wouldn’t usually try, but major savings pushed them over the edge. Example number one: a recent Groupon deal for skydiving ($149 down from $235) netted $357,000.
These sites have also been very careful to add in social elements so that buyers can broadcast their purchases on Facebook and Twitter, to share the deal with friends and colleagues. Furthermore, sites offer referral bonuses, so that people are enticed to bring in new group members.
These group buying often consist of meals, spa treatments, hotel packages, golf outings, museum tickets, and more, and as group buying continues to make its way mainstream, Groupon and other group buying companies will be forces to provide more specific regional offers. For example, Boston offers will soon need to be divided between downtown Boston, the north shore, south shore, Metro West, and Worcester area. This is because the audience for these offers is growing, and demands (both from consumers and businesses) will become even more specified and group buying evolves.