The advent of e-commerce has facilitated a larger volume of transactions and leveled the playing field to some extent for new players in the market. Companies trying to carve a niche for themselves are getting innovative with their marketing and publicity strategies. Group buying is a fairly recent phenomenon that has taken the internet by storm. According to a recent report in The Australian, the Group buying sector is likely to generate more than 100 million Australian Dollars in 2011. More than 15 group buying sites have a strong presence in Australia.
It essentially involves getting a certain number of customers on board for a particular deal to avail of the huge discounts on offer. People use social networking sites to enroll their acquaintances in the deal-hunting process. This is a win-win situation, offering free publicity to the businesses while allowing customers to take advantage of huge discounts. In case the number of people signing up for the deal is below a certain tipping point, the deal is withdrawn and the customers are refunded.
In Sydney, restaurants like the 'Atlantis Seafood Restaurant' and 'Gorkha Palace' offer attractive discounts exceeding 65 per cent on some occasions. Joints like 'Luscious Tapas Bar' cater to the food-loving denizens of Brisbane by slashing their prices by half at times. Steep discounts are also seen in the Health and Fitness industry, especially by newer fitness centers attempting to establish a presence in Australia's major cities. 'Tiaki Health Fitness' in Sydney and 'Axis Health and Fitness' in Brisbane are prime examples of gyms that garner substantial initial enrollments with massive discounts. The Computer Service Centers in most major cities are known to provide concessions in the 90 per cent range.
The buyer needs to understand that the major factor influencing his decision to sign up for the deal should not be the low cost but his need for the product. He should not be compelled to purchase something that he does not require due to the combined pressures of social media and the deal's time limit. Additionally, the customer needs to evaluate if the deal is saturated in terms of number of patrons. This would spare him the trouble involved while trying to make a reservation that thousands of other bargain-hunters are also trying to make.
Smaller businesses with a limited marketing budget are served well by group buying sites that offer them national exposure. The sites generally share their patrons' contact details with their clients and this massive electronic database can be used for marketing and other promotional activities. Luring one of these deal-hunting customers for a second visit is extremely challenging. Only businesses that make great first impressions can fully exploit the benefits of group buying sites.
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