How many similar companies do you know? I have been thinking about writing this article for months because I have not been convinced by the business model of these collective buying clubs that have come strongly, and that raise doubts about its viability first, and second about the real benefits for the products and services of clients that must dynamite their pricing policy, and therefore reduce their margins enormously in order to be able to attract new consumers through attractive offers.
About a year ago and peak began to see frequently the announcements of a number of companies that stood out for their offers of great discounts on products of recognized brands. Once the novelty is over, and multiplied the number of clones of these pioneering companies, are we witnessing the decline of the collective shopping clubs?
Problems of customer knowledge and their needs
I have to admit that these collective buying clubs caused me some interest as a user and I registered on a number of similar platforms. In this article I offer my personal experience as a user and analyze it as Marketing Director, so I have not conducted a market study with a number of surveys significant enough to provide data and results in a scientific manner. Now, I keep wondering why I still receive daily emails from one of the best known reference clubs with offers for 5 sessions of facial radiofrequency with hyaluronic acid, or 1 or 2 sessions of breast augmentation treatment. Or they have not realized that I am a man, or at the opposite extreme, Maybe they have obtained some type of information that tells them that I am married and that my wife needs such services, although I doubt that they have such a capacity to collect data. In any case, your indiscriminate sending of all types of offers seems to me a poorly focused email marketing exercise.
I have also discussed the topic of these clubs with professionals in the ecommerce sector such as Javier Echaleku, and the effect they can have on the consumer in terms of feeding their expectations of always buying products and services from the best brands at demolition prices. When a large brand has stock of certain products can act through these clubs of collective purchases by leaving the stock, but I noticed that those well-known brands that caught my attention to register in clubs no longer appear so frequently in their offers. Have you noticed this?
The techniques of neuromarketing applied by the clubs can be effective, but perhaps they manage to attract the wrong clientele to the restaurant on duty, which should not earn a lot of money because they have had to reduce their prices a lot to be able to feed those diners, and he never sees them again once the offer of the XX% discount has been withdrawn, to give a practical example. Can SMEs afford such an influx of consumers benefiting from prices thrown by the floors for not loyalty?
The Groupon IPO will accelerate the consolidation of the sector
Last Friday the media echoed the news of the IPO of a Groupon plethoric with the largest public offering of shares of an Internet company from Google, as reported by the newspaper El Mundo. The 700 million dollars raised should serve to increase the influence and competitiveness of one of the large collective buying clubs, and therefore put more pressure on smaller opponents. However, it seems that Groupon had a need to raise funds to cover losses in their operations, which reminds me once again of the doubt about the business model of these companies, which I believe is based largely on their ability to capture new customers to employ a large number of street vendors, that is, their activity requires intensive contact with the client. If Groupon registered losses, I wonder how the most modest clubs should be doing it. Other interesting milestones were the surprising close of Facebook Deals this year, which had emerged as an alternative, and the fall in revenue of the almighty Google, and Google Offers service that got 23% less revenue this August in relation to the month of July, although the number of offers had increased by 22% according to Europa Press. It makes me think that this market is not as tasty for the big monsters of the Internet as it might seem, and if Facebook and Google can not make it work with the resources they have, who will? that had emerged as an alternative, and the fall of income of the almighty Google, and Google Offers service that got 23% less revenue this August in relation to the month of July, although they had increased the number of offers by 22% according to reported Europa Press. It makes me think that this market is not as tasty for the big monsters of the Internet as it might seem, and if Facebook and Google can not make it work with the resources they have, who will? that had emerged as an alternative, and the fall of income of the almighty Google, and Google Offers service that got 23% less revenue this August in relation to the month of July, although they had increased the number of offers by 22% according to reported Europa Press. It makes me think that this market is not as tasty for the big monsters of the Internet as it might seem, and if Facebook and Google can not make it work with the resources they have, who will?
One of the solutions involves the customization of the offers
The Internet has changed our way of life, our way of thinking, acting and communicating. One of the great contributions of the online medium to the professionals of marketing and communication, and especially to SMEs, has been the birth and mass use of social networks. Just as I have no doubt that social networks are here to stay, the collective shopping clubs can happen shortly, or even have passed their golden age. Although there are initiatives of these collective shopping clubs to personalize the services to local businesses as the services that begin to be given to the users in the mobiles to facilitate the compulsive purchases, perhaps a greater knowledge of the user and personalization therefore of their habits of purchase, what you are looking for, when you are looking for it, what stores you visit, etc. I could once again give these buying clubs the va-va-voom that the user may have lost once their initial illusion has passed.
To summarize, the future of collective shopping clubs involves greater interaction with the user and personalization of the experience and offers received. While the collective shopping clubs try to improve these aspects, there are more social and agile companies that are beginning to show them how to gain trust and recover the smiles on the faces of the users.