While many local companies entered the holiday shopping season as relatively seasoned veterans at generating buzz and offering deals through Facebook and Twitter, far fewer appear to have latched on to the newest “social shopping” applications making the rounds.
Groupon Inc. made a splash with its Fairfield County launch a few months ago, but has not updated since late October the handful of area businesses featured on its “recent deals for Fairfield County” Web page, though it continues to ping members with a daily email with offers from local vendors. For instance, last week the Norwalk Peruvian restaurant Quechua and the Trek Bicycle Store of Fairfield offered half-off deals, and the Bridgeport Sound Tigers got more than 50 people to sign up for a recent deal for 45 percent off tickets to a hockey game.
Groupon negotiates discounts with businesses, then alerts consumers who can trigger the deals if a sufficient number of people sign up to take them ”“ often accomplished through friends corralling each other via social media.
Of the businesses featured on its website, Flipside Burger and Bar in Fairfield generated the most traffic through the site, with about 150 downloads for half-price coupons it is offering. Of the five local companies listed on the website in October, Groupon distributed just over 400 coupons for half-price discounts on purchases totaling $7,600.
Groupon reports impressive national figures: as of mid-December, the company had issued nearly 20 million coupons for just under $900 million.
If some retailers have been slow to join, according to online blogger Scott Bishop, it is because they do not look beyond the profit-loss equation on the immediate discount.
“Groupon requires your business to make a promotion better than anything else you”™ve done before,” Bishop wrote. “You also give up half of the actual generated revenue over to Groupon. So basically, unless you have a rather large profit margin inserted in your good or service, you”™re going to lose money. But losing money on a product is not always a bad decision. If you can get more foot traffic in your store and customers purchase other goods that are priced at a better margin, you can make your money back.”
A large number of local venues are listed on heavily-hyped Foursquare, a social networking site that purports to help people “explore” where they live. Few of the local venues were offering specials to those who “check in” after visiting the website. Same goes for Gowalla Inc., which operates on a similar model. Yelp, which has amassed hundreds of user-generated reviews on Fairfield County stores, only recently created a check-in function as the next step in its business model.
Still, the day appears to be coming when retailers will no longer be able to ignore the latest digital gizmos with which software companies are influencing consumers. The online auction company eBay has already coined a term for the second Sunday in December ”“ “Mobile Sunday” ”“ which it says has resulted in the most transactions generated on mobile devices. A November survey by Stamford-based InsightExpress LLC suggested that nearly one in five consumers plan to use barcode scanning technology on smart phones to comparison shop, and as many smart-phone owners will download coupons on their devices.
“The adoption of smart phones empowers us to be more knowledgeable consumers,” said Joy Liuzzo, senior director of mobile research at InsightExpress. “Successful retailers will embrace this knowledge sharing by giving consumers the mobile information they expect.”
