It is getting difficult to keep track of the different providers, model twists and geographic locations that have rolled out a social buying service. The latest examples come from Yelp, which is testing "Yelp Deals" – discounts at local businesses that site users can buy on one day only. It is being tested in San Diego and then in San Francisco and New York in the coming weeks. Another is Yellowbook, which has just launched a new website called Weforia , also focused on delivering local deals and discounts.
A New Psyche
With so many services and bargains, it is becoming safe to say that this model - pioneered by Groupon - is rapidly changing the psyche of retailing and online buyers. In a recently-released white paper, Moosylvania notes that consumers are being re-trained to "look forward" to their daily deal - by being driven by the notion of scarcity, whether it's a limited number of items available or by the time allotted for the sale, and by being rewarded by services that credits consumers for sharing the deals with their friends.
An appropriate question for this space, therefore, is not which new service will roll out, but rather, how are these services changing online buying and online marketing? Some thoughts:
It is accelerating the move to mobile commerce. Most of the services have converted to mobile apps Moosylvania noted, "so the next generation of saving and paying on the move will be in place as soon as retailers can accurately record and capture either scans from mobile screens or get the info into their PoS systems more easily." Viral adoption will be a normal retailing tool, it predicts - one that is much more potent than any other media reach available. "The possibility to get coupons while in retail locations will mean that most consumers will expect deals everywhere."
Marketing dollars will flow faster and more heavily to local campaigns. With so many ways to target specific markets and demographics, the value of local advertising will rise in general.
It will usher in a new definition of "discount." Many retailers who jump at these services are finding themselves overwhelmed by the response - and slightly disgusted at how little they received from the offering in the end, when the commission has been taken into account. Moosylvania tells of one restaurant in St. Louis that sold 4,200 Groupon certificates at $18 for $40 of value. "For this, they rang up $35,910 after credit card fees - for which they were paid in increments of $11,970 over three months. The kicker is that they have $160,000 in coupons floating out in the market place for a year."
