Business

Group buying phenomenon offers a great deal for everyone

Group buying sites phenomenon takes online sales and marketing to new heights.  - Photo illustration - contributed
Group buying sites phenomenon takes online sales and marketing to new heights.
— image credit: Photo illustration - contributed

Whether it's a dinner out, a weekend getaway or a self-pampering spa package, consumers are always looking for a deal.

But the days of scanning flyers and shredding the morning paper are over, thanks to what's quickly becoming one of the most popular online marketing and advertising campaigns going; it's called group buying.

In short order, the multi-billion dollar international phenomenon of group buying has taken the online world by storm. Already seeing huge gains, industry leaders like Groupon, LivingSocial and TeamBuy have paved a whole new avenue for online businesses looking to diversify their revenue streams.

The concept is this: build up a large network of subscribers using the ever-popular social networking sites, solicit local businesses for deals and pepper Internet users with the potential bargains they can access if enough people also sign up.

"This is the smartest business model that has hit the marketing arena in decades," said Errol Clark, creator of Vancouver-based group buying site aggregator DealbyDay.com. "It's a win, win, win - a win for consumers, a win for the businesses and a win for the group buying company," he said. "It brings positive cash flow to the companies who advertise this way, while getting the best deal for consumers."

A typical group buying site works by having subscribers sign up for daily e-mails advertising goods and services at deep discounts - typically half-price, but sometimes as much as 90 per cent off everything from high-end restaurant meals to trendy fitness packages.

However, one of the toughest challenges for the team buying firms is wrangling a large network of subscribers organically, Clark said. "We're all about growing our list from the ground up."

It's important to build a relationship with subscribers and not simply buy an e-mail list like some other aggregators do, he said.

Only weeks old, DealbyDay.com has quickly grown its subscriber base by aggregating over 14 group-buying sites such as Groupon, LivingSocial, TeamBuy and BCDailyDeals, creating a one-stop-shop for consumers to find the best daily deals going.

DealbyDay.com eliminates some of the e-mail clutter for online shoppers by aggregating all of the deals into one e-mail, Clark said.

Despite creating a consumer-friendly environment, the deal aggregator also gives considerable exposure to the group buying companies themselves, Clark added.

"Competition is a good thing. We're promoting better deals, and getting the sites exposed to a larger subscriber base."

It's not only the big guns like Groupon, credited with starting the craze in 2008, flooding the market, many news media and other online publication companies are jumping into the ring as well.

Black Press, owner of over 70 community newspapers and websites throughout British Columbia, recently launched BCDailyDeals, a group buying site promoting deals for businesses around the Lower Mainland.

Since its conception in mid-October, BCDailyDeals has quickly taken its stake in the group-buying frenzy.

Jason Naidu, BCDailyDeals project manager, said Black Press is in a good spot to compete in this market by leveraging its already-existing advertising client base.

Black Press has a sales team dedicated to reaching out to existing advertising clients, getting them involved in a new, fresh advertising opportunity, Naidu said.

"We feel our existing multi-media power gives our product a chance at longevity."

BCDailyDeals differs from some of the other group buying sites by focusing on bringing deals to consumers and businesses outside of the city centre, Naidu added.

Some of BCDailyDeals' most successful deals include: $10 fr $20 worth of Montreal smoked meat and deli fare at Estrella's Deli in Langley; $11 for $22 worth of food and beverage at SandPiper Pub in White Rock and $39 for an organic paprika facial at Trinity Spa & Salon in Burnaby.

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