Rise of Group Buying Sites

Have you bought off a group buying site, such as Gilt Groupe or Groupon? These sites are growing extremely quickly. Sales from private sales sites will almost top $1B in 2010 and sales from group buying sites will reach over $350M. Site visits to group buying sites are up 72x over last year. Although these sites started with high-end products, they have gone mainstream. Groupon and Woot sell many other product categories including consumer electronics and sporting gear, at more affordable prices.



Source: Assorted company press releases, Google/Compete State of Shopping, May 2010 and Hitwise Blog, April 23, 2010. Note: Group buying site estimated revenue includes Groupon, Woot, Living Social and Tippr.

What is it about these sites that are connecting with the customer? It seems to be about scarcity and urgency -- shoppers love the thrill of the hunt. It makes shopping fun, and offers customers a daily break in their workday.

So what can you do to encourage similar engagement with your product or brand? Try to replicate excitement and urgency on a daily or weekly basis. Make your customers feel special, and provide them unique deals, or limited time offers.

Posted by Heidi Spector, Google Retail Team