First came Google, then came Facebook, now comes GroupOn. Yes, ladies and gentlemen, this is the next big thing. Half a billion dollars in revenue in less than one year. That's right, I said dollars. Not impressions.
What is GroupOn? Well, it's the leader of the pack in a new phenomenon called "social shopping" or "social buying." The site is simple and compelling. Every day they have a new fantastic coupon for a local business—the other day they had 50% off of Go-Kart racing at a place near San Francisco (guess what the gang at Traction is doing next month). The only catch? The deal is only valid if 200 people whip out their credit cards and pay for it on the spot. So, people are incentivized to go bonkers trying to get their friends to join in to "unlock" a GroupOn coupon they really want.
|Today's GroupOn Deal of the Day|
The site went legit last month when Gap pulled in $11 million running a nationwide promotion on GroupOn. They sold nearly half a million vouchers in one day.
Of course, just like Facebook isn't the only social network, GroupOn isn't the only social shopping site. There are plenty of copy cats and plenty of other models that combine social media dynamics with e-commerce.
- Gilt.com also reports having $500 million in revenue. It's an "exclusive" club (if you can call over two million members exclusive) that gives members access to great deals on luxury items.
- Delta airlines now allows passengers to book tickets in Facebook.
- Sites from Amazon.com to Kaboodle.com have social recommendation engines and shared shopping lists based on what others are buying.
There's plenty more (Would love it if you'd share other examples in the comments!).
As a marketer, it's important for you to think strategically about how your brand can take advantage of it. Clearly, there are a lot of directions you can go, but one thing is clear. Social shopping is a trend with some serious Traction.