Grooster Blog: July 2010

Online shopping hasn't changed much over the past decade. The most popular online stores in 2000 continue to be the go-to online stores today. Most of these stores, like Amazon and eBay, haven't changed. Redeye VC has a good perspective on the past decade of ecommerce change. However, in the past 12 months there has been a tidal wave of innovation in ecommerce with localization, deal sharing, mobile, and marketing. Game mechanics are part of this wave that is enhancing the online shopping experience.

I think of game mechanics as the design elements that are traditionally found in games.  Leaderboards, points and trophies, level-ups, and reputation systems all create engagement and improve the players experience.  In ecommerce, rather than a simple listing of products, game mechanics can help immerse consumers in the discovery and promotion of products.  This helps to engage consumers with the shopping experience and results in new users, retention, and sales.

Many successful non-ecommerce sites include game mechanics in their user experience.  Yelp, YouTube, and
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It can be tough to figure out the pros and cons of adopting a trend. Although flash and group buying is an older concept, originating in China called Tuángòu (pronounced "twangoo"), it has experienced huge growth recently. Flash buying is based on a limited time deal typically lasting less than seven days. Group buying is built around the concept that a minimum amount of buyers is needed before a deal is activated. Although group and flash buying promotions are different, they are frequently coupled together.

The benefits of doing a flash/group buy for a local business can be significant because it is so simple and measurable. Unlike traditional marketing promotions, flash buying businesses typically do not get paid unless new, paying customers are delivered. Therefore, local businesses know the exact cost and value of the flash/group buying promotion. The ability to measure so tightly reduces the risk for local businesses.

There was a Grooster deal in June that could not get enough buyers to hit the minimum and we initially
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There is no question that flash buying and group buying ecommerce sites are growing like wildfire. I continually get asked why I entered such a competitive market. Can the market sustain many group buying sites? Can Grooster differentiate? Great questions.

When I first started development of Grooster in Jan 2010, there were no local group/flash buying companies live in Vancouver. Now there is Groupon, Living Social, Grooster, Team Buy, Steal the Deal, Good News, Wagjag, and I'm sure there are others. Each one has its own subtle spin and I believe their niche will become more apparent as time goes on. Globally, there are over 150 group buying sites that I'm aware of.

Although it is a competitive market, there is a huge opportunity to help consumers discover local jems and to help local businesses find and retain customers. There are some current trends that make today a huge opportunity to add value to consumers and local businesses.

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Grooster was featured on Global TV News Hour on June 21st. It is an interview including someone redeeming a Grooster Pass at Benton Brothers Fine Cheese, a fantastic place to get cheese. The official Global TV video can still be watched at Global TV's site at 23 minutes.