Daily Deal offerings like Groupon is not the same as group buying!
I'm constantly surprised that the fury of daily deal offerings like Groupon and LivingSocial and others are thought of to be the same as group buying. I don't have anything against Groupon or LivingSocial. In fact I've used them once, each. In my opinion, the core element of Group Buying is that the price of the product/service is lowered based on how many people are participating in the offering. The more people who have committed to buy something *should* drive the price lower. Obviously there's a limit of how low it can go. Also, it makes a big difference if the offering is a product or service. The caveat being that service offering's price shouldn't be as much affected by the number of participants as it does for products. It takes time and resource to provide service, vs when buying a product scales better with more people.
I'm not surprised to see articles like this one that shows businesses are not that happy with these daily deal offerings. As a consumer, I don't find the daily deal offering to be serving a primary need of mine (to save money on the products and services that I already use). This is why the daily deals are more like display advertisings that I have learned to ignore almost all the time. Oh, how great it would be to have a true group buying service!
Tuesday, February 15, 2011
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About Me
- Ramin Naimi
- I have over 18 years of experience in various high-tech industries. I am currently leading the Web Infrastructure team in TinyPrints, a small company that is revolutionizing the Greeting Card business. In recent past, I had managed Yahoo’s monitoring infrastructure group (part of platform engineering group). We developed and operated Yahoo’s internal monitoring and operational metrics collection systems. I have a wide range of experience from client side development to distributed servers.
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