Get Your Group On

There have been attempts in the past at group buying, but nothing beyond the traditional warehouse model has succeeded, at least in the US. Yes, "mob shopping" seems to work well in China, but it just never caught on elsewhere. A start-up in Chicago called Groupon has taken a unique perspective on saving people money. It facilitates group coupons that are only valid once a minimal number of people have agreed to the deal. These deals are typically focused on services instead of merchandise, so restaurants, spa treatments, and pilates are most popular.

Groupon.JPG

Groupon focuses on local businesses, so it covers 24 major cities including my hometown of Austin, Texas. Each day a deal is presented with a minimum number of people before the deal becomes valid. This ensure that the business' coupon will drive enough traffic. For example, today's deal in Philly is $45 for Five UrbanFront Pilates Mat Classes ($90 Value). Today's deal in Boston is $65 Haircut, Style, and Blow Dry at Mizu Hair Salon. 50 people were required to accept the deal, and when I checked they were up to 532.

This is an interesting concept that could spill into other segments of retail.

PS- This blog posting was created 35,000 feet in the air thanks to American Airlines Wi-Fi.

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