This resembles Facebook's early years to a certain degree, where everyone is trying to clone and develop some sort of social networking services.
Business model of the year?
Not really. Surely there had been plenty of online sites out there leveraging on collective buying power. The distinct difference that sites nowadays have is, it's dead simple to use. One deal a day and the deal only becomes valid if a certain number of buyers are committed to it.
More importantly, services like Facebook and Twitter have made it easier to build crowd and spread the word. The barrier of acquiring customers via attractive coupons is also relatively lower, who doesn't love bargain?
What does it mean for retailers?
So, what do the retailers get in return? A one-day-fame and bulk orders (how about profit?).
Come to think of it that group purchasing sites are connecting offline retailers with the online masses. Look, the bargains offered are usually from food & beverages and service oriented businesses like spa, yoga etc.
Generally, those businesses are small or new in the market. Therefore, they can't afford a strong online presence to reach out to the online crowd. This is a great channel for them to establish themselves in the market.
It is important for businesses to offer excellent service too despite the bulk discount given. Never start offering bargain if repeating customer is not your ultimate priority.
Image credit: George Russell / The Chronicle
