From Groupon to Groupoff: How Aggregators Will Change the Group-Buying Game


I writea lotaboutGroupon and the many Groupon clones because, well, I find the group-buying phenomenon all quite fascinating. So you can imagine that it would take a lot to drive me to the brink of Groupsanity. But here I am, and this weekend I started doing a very bad thing. I began unsubscribing to all the various group-buying sites I had subscribed to.

Like a sniper picking off his prey one by one, I methodically went through my in-box and pushed the "unsubscribe" button on as many as I could find. Yes, those sites had delivered a few nuggets, and I knew they would deliver more. But I'm not shutting down my group-buying addiction. Rather, I'm evolving into a higher group-buying type of being, one that I suspect the many group-buying companies wouldn't like too much.

I did keep my Groupon subscription, although I set it to auto-archive anything that comes to my in-box. The one group-buying service I hung onto was Yipit.

A Tipping for Group-Buying Behavior?

This small but fast-growing service delivers a summary of all the various group-buying offers in my area that I might be interested in (tending toward food and sports, and avoiding spas and facials, in my case). If I see something I like, then I click on it. Or even not. I can check Yipit's website once a week and skip the email -- and get pretty much the same effect.

What my behavior, which perhaps is an outlier, points toward is something of a tipping point regarding group-buying behavior, a rapidly approaching moment when *nobody* wants to subscribe to 45 group-buying lists. Instead, folks will soon see group buying as more like shopping for groceries than waiting for that impulse offer to land in your in-box.

In other words, I generally ignore Yipit, but when I want to find something interesting to do, I go to the site and check out what's on the menu. Or I go to 8Coupons, another deal aggregator with a heavier emphasis on more traditional online coupons. And there I pick and choose what I please from across the entire spectrum in a much-easier-to-parse format.

More Like Shopping for Shoes

This is the law of the Internet jungle. Once a category grows too big for mere mortals to deal with, the aggregators step in and create an interface to make sense of it all. And these aggregators have huge power over the entire segment. Once they gain control, they can charge for preferred placement, for example, or extract percentages of each group deal.

This is a glass-half-full type of thing for the big players. On one hand, Groupon will have the cash to dominate buying of aggregation credits and will have the critical mass to continue as an industry leader. On the other, aggregators are already leveling the playing field by making shopping for deals more like shopping for shoes.

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For the merchants, this is no big deal. They don't care too much who delivers their new customers. However, for Groupon, LivingSocial and other giants, this is a really big deal because they lose control of their customer and could find it more difficult to get people to sign up for extended usage.

Granted, you have to give the group-buying sites a credit card number, but watch for someone like Yipit to create a group-buying "wallet" that allows for transactions without requiring a user to give credentials and credit card numbers to every single group-buying site.

I could be entirely wrong here. But I believe two things will happen. First, aggregators will gain power. Second, either Groupon or LivingSocial will seek to become aggregators themselves. He who controls the highest customer interaction almost always wins online.