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If you want the coupon, you better scoop a group


Ok, I have a confession to make.

I’m a bit of a shopaholic.

Then again, what girl isn’t?

As of recent, I’ve been hiding my shopping sprees from my partner via online retailing (God sent!), and recently, I’d come across this website called, where they feature deals from different service industries, e.g. haircuts, personal training classes etc.

It was there that I found a deal that was too hard to miss – 70% an hour’s worth of facial and massages (Yeah, so I like to be pampered once in a while….).

Intrigued (but sceptical), I checked out what this website was about. It follows a concept called internet ‘group buying,’ a very intriguing way of ecommerce.   

How it works is that when there is a daily deal, members are alerted of the offer. If they’re interested, they click the agreement to buy, BUT they will only get the deal (and pay for it) if the required minimum number of people is reached. For example, the massage and facial offer needed a minimum of 30 people to buy it before I could get the deal, otherwise I would miss out. So what do I do? Tell all my family and friends of course, so then I would get the bargain!

So my friends and I signed up (still sceptical), and before we know it about 50 other people around Melbourne had clicked on the deal also, and within 2 minutes our voucher and invoice was sent to our emails! The vouchers last for a year and there are varieties of different deals a day, from pedicures to life drawing classes. The last deal which featured a 59% discount at an all you can eat restaurant, had over 4000 clicks! That’s an extra 4000+ customers that the restaurant will be serving within the next year! Well known companies such as Bridgestone auto services and Contour gyms have used these mediums as a way to reach out to new customers.

Scoopon’s Bridgestone car service deal

This internet group buying concept started off in the US, where Andrew Mason decided to take advantage of the bargain hunting hype on the internet, and hence formed ‘’ After just 17 months, is now valued at US $1.5billion. Pretty impressive huh?

Well it had to be, because now there are so many sites following the same business model, with Australia’s Scoopon, Spreets and Jump On it booming in the market. 

These deals usually end within 24 hours, so it encourages people to use the most convenient and viral way to spread the word quicker – Facebook, Twitter and email –  the perfect way for today’s obsession with social networking. Not only that, but most of these group buying sites reward you when joining their social networking sites, such as further discounts on future deals.

Most of these sites popularity are primarily due to social networking. has 450,000 followers on Facebook since April this year.

These websites are like advertising. Whether or not a single person buys a deal from a certain company, the company is still getting featured in a newsletter that is sent to thousands of people – at a much cheaper rate than other forms of communications. These sites only feature one deal per day, allowing them to concentrate all marketing resources towards distributing the one deal for that company.

Companies themselves have been doing discount deals for centuries, from in store promotions to snail mail coupons, but this is a different way of getting people through the door. It reaches a much wider customer base and is viral – the likelihood that people will spread the word of a good bargain on the internet is much higher.

Furthermore, it will give companies the chance to sell themselves to customers who use the coupons to try the service for the first time, with the potential to gain regular business from them.  

So for those who love a great bargain, I’d suggest that you try these sites!!

Article Sources: (In sequence)

Scoopon, 2010, Melbourne, viewed: 12 September 2010

Boehart, K, 2010 ‘A deal on a haircut? That’s what friends are for,’ the Mossberg Solution, Wall street Journal, 23 March, viewed: 12 September 2010

Scoopon, 2010,  ‘Bisq bar and grill all you can eat’, Melbourne, viewed: 12 September 2010

Coburn, L, 2010, ‘Groupon Ceo Andrew Mason talks growth, clones and why Groupon isn’t a coupon site,’ TNW Location, 24 March, Viewed: 13 September

Steiner, C, 2010, ‘Meet the fastest growing company ever,’ Forbes Magazine, 30 August, viewed: 13 September  

JumpOnIt, 2010, Melbourne, viewed: 12 September 2010

Spreets, 2010, Melbourne, viewed: 12 September 2010

Rolfe, J, 2010, ‘Discount coupon websites offer savings over sixty per cent on items,’ The daily telegraph, 30 August, viewed: 12 September


3 responses

  1. Hey Sandy,
    This is really well written and researched article, I must say..
    I first heard of this kind of website when I joined up with a Facebook group called Secret Melbourne, which wasn’t that great actually, but kept throwing up ads for a website called : the same business model that you’re talking about here. I actually thought this was quite innovative; I wasn’t aware that there are quite a few websites with this strategy.
    But reading this does make me wonder, if there are more and more websites doing this, how would they differentiate themselves? One aspect would be the companies and brands they give offers for I suppose, but I cannot think of much on this. Any thoughts?

    September 22, 2010 at 8:24 pm

  2. Good ol’ group buys 🙂

    It all goes back to the basic power play. Advantage of who has more power for the situation, the buyer or the seller. If the buyer has more power, he can strike a bargain, while if the seller has more power for the deal, he can hike up the price.

    If 50 guys go to a shop and guarantee a purchase if the shopkeeper takes $20 off a marked price, and if the shopkeeper’s purchase price is still covered after that $20 off, most likely those 50 people will be striking a good bargain.

    Sometimes, businesses give off discounts even if it doesn’t meet their cost price, like in most of the deals on Scoopon. That’s done to promote their business.

    If they are sure that by allowing 1000 new customers to try out their product/service at a cheap price will guarantee them at least an 80% repeat purchase, that is a cheaper promotional strategy for them than posting ads, tv adverts, banners etc.

    Got to love how these deals defy the simple rule of Demand and Supply in economics 🙂

    September 28, 2010 at 7:05 pm

  3. Rumi – it’s interesting while I was doing my research that all these group coupon sites pretty much follow the same format and layout, not much differentiation at all. Even the deals I see for one site would sometimes be the same for another! (Yes, I’m signed up to like 4 different sites). I think everyone is trying to jump on the bandwagon while it’s still on a roll. I can predict that some sites will eventually drop off when the hype is over, but for now the bargains are getting people in!

    Sid – I agree! Discounting is a tool that’s been used waaaaay back to promote business and get people in the door. Funny thing is, it’s not always the best option. When I used my voucher that I got off Scoopon the other day (the massage one) I asked them how they liked promoting through the website and I got a head shake and a ‘don’t even ask…’

    Apparently for them, it has been a disaster. They had two promotions running through the same site and they both got more deals then expected (about 600 vouchers were issued). They’ve been bombarded with appointments, and not only did they not have enough staff, they’ve had to, at times, cancel or rearrange the appointments of some of their long term clients to serve new customers.

    The group buying concept is a great idea, but I think there’s opportunities to operate it a bit better for business who promotes through it.

    October 5, 2010 at 6:29 pm

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