Groupon Effect - Dawn of the New Internet Bubble
After almost 3 years since Groupon's online debut, thousands of knock-off daily deal websites have come online. Groupon's success has spawned a new Internet bubble many with some variation but the premise remains the same. And many daily deal start-ups want a piece of this sweet pie. But why are these companies trying to get into a market that Groupon is already dominating? The truth is, in today's tough economy getting a huge deal is just about every consumers dream come true. And studies have shown that consumers really don't care where they are getting their deals from as long as there is a great deal to be had - they will be there. This makes it very easy for companies to be interested in such a market. As an example, let's say a small daily deal start-up has a great deal running on its site, the chances of both Groupon and any other daily deal sites running the same deal or even a slightly similar deal from the same company is very remote. So even if only for a day, many daily deal sites can become a monopoly and generate a huge following. In fact, many daily deal sites don't even offer deals directly instead they become the aggregators of deals from other sites thus giving the consumer a way to get only deals they are interested in. And it doesn't matter if the deal is on Groupon or another daily deal site, the consumer just wants a great deal. This makes the market very attractive for just about any daily deal startup. But why is this new form of advertising so big with small and large companies?It's simply really; most of these daily deal sites guarantee a minimum number of customers. When was the last time your advertising agency offer you that kind of guarantee, probably never. But what's even more attractive with this form of advertising is that everyone involves win. The consumer gets a huge discount, sometimes upwards of 90% off goods and services. The businesses in turn gets tons of traffic coming through their doors that they can up-sell, cross-sell and potentially generate new repeat business at the regular prices. Finally the daily deal sites gets to split the proceeds from each sale with the businesses allowing them to see profits sometimes in as little as 6 months. This is a model that creates a win, win, win situation for all involved. I can't remember the last time I have seen that in any business model. Would this bubble burst?
Well, we never really expected the dot com bubble to burst or even the housing bubble. But that is the nature of bubbles when they get to big and over-saturated they pop and only the best survives. The Groupon bubble is no different, but my prediction is that this bubble has not even properly inflated yet. There is still a long, long time to go on this one. As far as I can see as long as there are customers, businesses and deals to be had this bubble will be around for a long time, even if only some limited variations. http://www.dealpike.com Article Source: [http://EzineArticles.com/?Groupon-Effect---Dawn-of-the-New-Internet-Bubble&id...] Groupon Effect - Dawn of the New Internet Bubble
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