Rise of Group Buying Sites

9/15/2010 11:24:00 AM


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.


Brian's Mind said...

Hi Heidi, You're right about the scarcity and the thrill of the hunt. It's also about finding a trusted source to tell you about new stuff and things to do. There is a little of the social proof to it (something your mom used to say about everyone else jumping off a bridge). Our bet is that you'll see more of these sites coming from already trusted sources, like local publishers of traditional media (poweredbytippr.com).

Ray said...

This comment has been removed by the author.

Ray said...

If you're in the NYC office, Zagat and Dealon now offer Zagat Exclsuives...great deal from 21 club today here -


(sorry forgot URL last time.

John Shea said...

I love what J. Crew has done in this vain. They created an online "factory store" (aka Outlet) that is open only on the weekends. Very net idea playing nicely on scarcity / thrill of the hunt concepts. I do wonder if they would be better off scheduling it on a weekday though...


Ganpati said...

Rise of group buying sites are always a good option.

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