Rethinking The Group Buying Concept For 2022

By | June 2, 2022


The group buying concept should have been reworked years ago

Remember when the group buying concept virtually snatched the popularity away from all other e-commerce models? That day is long gone. Today, group buying is anything but sought after.

Group buying had success, but its diminishing value called for a different approach. Unfortunately, that call was never really answered by the leading companies in the sector.

With a new business calendar about to go up, we want to use the Internet’s time-traveling capabilities and rethink group buying. We’re going to visit some thought leaders and highlight the warnings that were ignored. Perhaps this can bring new inspiration for 2022.

Group Buying Concept Rework 1: Customize It

“Retailers adopted the idea without understanding the nature and needs of their customers. Mass offerings were created with no customization, aiming simply to reach as many people as possible to increase store or website visits and purchases. For many, this ate up their marketing budget, leaving no room for targeted outreach efforts.”

Dr. Islam Gouda

What Dr. Islam Gouda was thinking: Customer behavior is key in crafting any offer. What type of group do you aim to attract? Do you target customers with specific cultural backgrounds, genders, style preferences, lifestyles? Do you sell a product or service that friends might purchase together?

Retailers who control the type of visitors when planning a group buying offer typically have better sales. Mass selling doesn’t work; customer preference is what builds customer loyalty and frequency.

Group Buying Concept Rework 2: Focus On Social Selling

To get those 100 people buying your deals, you will need a database of happy customers, something that doesn’t come easily. Using email databases won’t work — you’ll end up on spam lists.

Jess Green

What Jess Green was thinking: To get real, dedicated and repeat buyers on any e-commerce website, you need a strong online (and some would argue offline) presence. You’ll need staff who can do the sales, add the content, do design and development work, and the list goes on and on.

The group buying concept was welcomed by small business who had neither the expertise or mailing lists to effectively offer discount solutions to their customers. So company’s should simply focus more on social selling. Group buying will become more easily incorporated into the workflow.

Group Buying Concept Rework 3: Group Buying is not Groupon

“Sucking value out of the small business market will ultimately damage the local merchants that are the bread and butter of Groupon’s base. Groupon’s model is not sustainable. In a race to the bottom everyone drowns.”

Bill Bice

What Bill Bice was thinking: The classic defense of Groupon’s financial arrangement is that it’s a reasonable cost to bring in new customers. However, Groupon’s own research once estimated a return rate of just 22%. Others have estimated a number much lower.

A study by Lightspeed Research shows that 63% of Groupons are purchased by existing customers. Just 2% of buyers who returned had never purchased from the merchant prior to the Groupon. So the merchant essentially gave away 75 cents for each dollar of business from the other 98%.

This point just reinforces the need for companies to focus more on their own social selling. All they would need then are tools to fuel the group buying concept most relevant to their market.

Group Buying Concept Rework 4: Customer Is King

“While these online flash sales certainly lure in bargain hunters, the untargeted nature of daily deals means that most shoppers are left wanting. It would be sheer luck for a shopper to come across a discount for a product they actually need on the same day that the merchant is trying to clear it. Group buying, as we know it, has missed the stickiest part of Tuángòu; customers organize the deal, not sellers.”

Abi Hatter

What Abi Hatter was thinking: Abi Hatter was thinking exactly what LetsPool! thinks. This collective bargaining model has been put into practice across a number of sectors with great success, most notably ‘The Big Switch’ campaign in which 200,000 people joined forces to secure cheaper energy tariffs.

We recently featured startups like Loop in our article 16 Group Buying Startups In 2022 You Didn’t Know. The group buying concept in some cultures is simply a way of life. Group buying is most exemplary when it serves a community need. When that need arises, customers should have access to a platform for handling group buys.

The New Group Buying Concept

Actually, the group buying concept that we’re advocating is more old than it is new. It’s a combination of social selling and social buying. This group buying concept is also extremely straightforward.

“Vendors that thrive in 2022 will be those that get up to speed with social selling. If your social selling is on point, it’s a small step to introduce your customers to social buying. No commission-mongering third parties or disappointments included.”



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