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Consumer Purchasing Decisions, the Fall of Daily Deal Sites, and B2B Group Buying

By Townes Haas   |    March 7, 2014   |    12:44 PM


Have daily deal sites coached consumers to only buy heavily discounted goods and services?
So called “Deal of the Day” websites like Groupon, LivingSocial and others catapulted group buying into popularity, allowing customers to purchase goods and services at rock-bottom prices. The growth of group buying platforms has been so intense that niche sites have been created for everything from designer fashion to vegan foods, and recently business-to-business (B2B) group buying sites have entered the scene.

Despite news surrounding Groupon’s downfall, group buying in the business to customer realm is still relevant, and a2013 study from Ryan Partnership found that daily deals sites and emails were the most likely to fuel impulse purchases.

Is the “Groupon Effect” real?
Have daily deal sites coached consumers to only buy heavily discounted goods and services? Some merchants argue that these daily deal sites are coaching consumers to expect to pay very little for items, and killing profits for small business.

But, there are signs that the Groupon effect is fading as consumers grow weary of daily deal websites.

Consumers are experiencing deal fatigue
After the daily deal frenzy of 2010 and 2011, growth fizzled out. 2012 and 2013 saw consumers experiencing “deal fatigue” and weariness toward irrelevant, mass emails each day.

Consumers still appear to be utilizing daily deal sites, but the rapid-fire growth these sites experienced hasn’t lasted.

Businesses, however, will continue to use group buying platforms
There have been stories about how Groupon ruined small businesses, but feedback from small businesses seems to be mostly positive, and many say that daily deals have improved their profits and helped them acquire new and repeat customers.

Even though consumers may not be a deal-crazy as they have been in the past, if businesses are still offering deals, savvy customers will continue to purchase them.

Does group buying exist for B2B services?
Despite the huge success of business-to-consumer group buying sites like Groupon, promotions and low cost options for B2B services aren’t as well known. But, the good news is that they do exist!

Businesses can utilize their collective buying power to score deals on business supplies and services, like search engine optimization from Moz or press release services.

What are some of the top B2B group buying sites?
·Rewardli offers special deals and promotions on business services, such as 30 days free and 10% off of GoToMeeting and advertising credit from Twitter.
·OrderWithMe allows small businesses to aggregate their inventory purchases with other small companies to get the best pricing from their network of suppliers.
·BuyerHive is a paid membership based site that offers business owners the chance to grab goods and services at low prices from more than 300 suppliers, including major companies like Amazon, Best Buy, and Staples. Buyers can earn cash back, too.

What are the benefits of B2B group buying sites?
Business-to-business group buying services offer benefitssimilar to consumer deal sites, and are perhaps even more pronounced for smaller companies.

Group buying sites let businesses band together and purchase only the inventory that they require, securing pricing usually reserved for large orders. These sites also let businesses test out services they might not otherwise utilize, like advertising on Twitter or search engine optimization from Moz.

Group buying isn’t just for the business-to-consumer world
While B2B group buying sites are still in their relative infancy, they quietly endure. Perhaps this is a good sign – rapid growth and hundreds of websites catering to this territory could be bad news, if Groupon’s story is any indication.