Consumer Psychology for a Digital Age

The Pros & Cons of Group-Buy [Infographic]

Here’s a super infographic on the pros’s and con’s of group-buy social commerce platforms from both a customer-focused perspective and a retailer perspective – from the team over at review site – SiteJabber. Smart accompanying article too, summarising the Rice University study on the effectiveness of group-buy platforms.

5 Hurdles for Group-Buy

  • Impression among retailers that running group-buy promotions is not profitable
  • Perception among consumers that group-buy deals encourage needless spending
  • Idea among end-users that group-buy refunds are rare
  • One bad experience and retailers don’t come back to the platform
  • Deal constraints make buy-in tough for retailers  (e.g. minimum 50% discount)

Comments (8):

  1. Jeff Molander

    February 15, 2011 at 10:19

    14% retention rate? Bogus. And who reports that… Groupon? Let’s see the research, y’all.

  2. Adam Sweeney

    February 25, 2011 at 07:33

    Deal success depends on the scarcity factor, and it’s astonishing how quickly these dealsites have hobbled themselves with being common as muck.
    I think they need to make more of a play to the inherent satisfaction of consumers interacting – that allows them to evaluate the opportunity and get excited.
    Know what happens when people are excited about tickets to a gig being released? The buzz about it beforehand causes a feeding frenzy when the tickets are released, much more so than if tickets were just suddenly available. Perhaps we should have a 24h lead-in to each deal?

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    May 2, 2011 at 23:36

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  4. melanie vau

    April 15, 2012 at 02:48

    I am still waiting for my GrouponAus and LivingSocialAus purchases from Feb 2012 to arrive; help desk and social media contacts extremely unhelpful. Are some of the big group buying sites in trouble?

  5. melanie vau

    April 15, 2012 at 02:50

    I am still waiting for GrouponAus and Living Social Australia purchases (both from Feb) to be delivered or refunded. Help Desk NO HELP at all. Are these big group buying sites in financial trouble?


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