Groupon: Power to the People

When I was in the States last summer, I came across this Facebook Ad about amazing discounts around our area. I couldn't resist the huge discounts they offered on cupcakes so I immediately clicked the Ad link. I then found out it was a website that featured one coupon a day. But it isn't your ordinary free coupons, in Groupon, a certain number of people have to sign up for the particular coupon of the day for it to be available to everyone. Groupon calls this Collective Buying Power. For example, today's deal is a $75 Photo Session which is ordinarily valued at $215. For the participating Photo Studio to allow people to avail of the 65% discount, a minimum of 50 people have to sign up.

This is yet another example of how the internet can provide more options and better deals to consumers, and how it can aid in promoting small businesses. Through Groupon, consumers never have to pay full-price. They just have to watch out for the deal they want to avail of, which Groupon makes very easy by sending daily e-mail messages about their deal of the day. Since Groupon is area-specific, that is, each area has its own deal of the day, people can easily redeem their coupons in their own neighborhoods. On the other hand, Groupon taps into local sellers and service providers, which allows them to promote their services to the local market, their potential regulars. Groupon's sign-up mechanism ensures that only serious buyers can avail of the coupons since they do not offer the usual percentage-off discount. Instead, what they do is sell the coupon itself, to be redeemed at the participating store. According to Wikipedia, this reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. Such is a more effective way of selling products and services than just giving away coupons people usually just throw away.

It is amazing what technology, creativity, and marketing-smarts can do. Groupon has evolved into a multi-million dollar enterprise, servicing 40 markets in the United States. Their customers get the best deals in their respective cities. Their partners are able to reach out to their market. Undoubtedly, a win-win-win situation.