The last few weeks have seen a fair amount of content on the future of the group buying ecosystem. I believe that the daily group buying model is starting or has started evolving. Call it daily group buying 2.0, but more on that in a bit.

The deal fatigue that users are experiencing in mature markets have been widely reported. It indicates that the buzz is dying as the users are no longer buying the deals.  The industry having low barriers to entry is ensuring that new companies enter the space on a daily basis (it is a bit of a vicious cycle).  It all boils down to deal quality and the providers ability to create an experience that will accelerate impulse buying. The group buying concept in its simplest form is “impulse buying with a credit card on the Internet” .

If I look at myself, I have unsubscribed from a fair amount of email from these services as the deal quality in South Africa has dropped. The model is broken in my opinion as the experience category products can only stay relevant for so long. I maybe generalising but it seems that every deal site sell deals on similar categories.Surely having a different value proposition could lead to new set of users?

Also I am not sold on these multiple deal emails that have started recently.. maybe I am in the minority but showing me 4 deals fro 4 different companies is great to parade your  deal inventory but surely one deal per email is the best?

When Scot Wingo wrote on eBay Strategies that Groupon may be a potential challenger to eBay & Walmart, it confirmed to me that the shift has started.

Introducing Groupon Product Months ago, we discovered (and I continue to be amazed there’s no press on this!!) that Groupon has been running daily deals in the UK and internally seems to refer to this as “Groupon Product” as noted in this famous leaked internal email from Groupon CEO Andrew Mason: (bolding is my own) Travel and Product are enormous opportunities. After only a few months, they’re already making up 20% of revenue in some countries. We sold $2M worth of mattresses in the UK — in one day!

There is nothing wrong in looking to diversify your offering to users. The problem comes when your primary product offering is looking fragile in the minds of the media and the finance world. Groupon has one intangible that could make this a compelling service, the ability to contact their user base daily. A colleague drew my attention to the fact that this concept is not new. Woot, the Texas based daily deal company that Amazon bought in 2010 does exactly this. They have being doing it since 2004, a whole 4 years prior to the emergence of Groupon.

Daily deal 2.0

As I mentioned earlier there is innovation being done in the group buying space. GroceryRun in Australia is an example for where group buying is headed in my opinion. If these services provide deals on items that users need (we all eat and need groceries) then coupons will be bought. GroceryRun also adds an air of exclusivity to their offering due to having it available for a set period of time (it sounds a lot like a combination of group buying and flash sales). The only difference I can spot is, that instead of the deals being done daily, GroceryRun is from midday on a Wednesday to a Friday.

GroceryRun.com.au – the grocery arm of the daily deals website CatchoftheDay – yesterday joined a growing number of online grocery stores, including SupermarketDeals and OffYourTrolley, offering non-perishable grocery products at up to 50 per cent off. The grocery e-tailer will operate for 48 hours, Wednesday to Friday, every week, and will sell between 200 and 300 discounted products, from coffee to cleaning products for a flat delivery fee of $11.

Seriously, we are thrilled to offer you the best deals around on your supermarket stuff as we already have twice a month on CatchOfTheDay for the past year. You will not find everything that is available at your local supermarket, but what you will find is a glorious mish-mash of 200+ branded household goods at Australia’s best prices.

I see a whole lot of potential here as it combines deep discounts and traditional retail.  It adds another element into the group buying space.