Never mind Facebook. The websites that more and more people are opening as they begin their days are group buying websites such as Groupon, VuvuPlaza, WiCount and OneDayOnly – to see what special deals they can pick up.
Following the trend internationally, these group buying sites have proliferated over the past few years in SA, and have now become a highly competitive way to shop for anything from spa treatments to holidays, flight tickets, gym memberships, hair or optical appointments, restaurant meals, wine, kitchenware, jewellery, gadgets and DIY products.
Discounts of up to 90 percent are common on group buying sites. You register online, and when you make a purchase using your credit card, you get an e-mailed, printable voucher to redeem the product or service.
“I’m a big fan. I’ve bought a haircut, a meal and a guest house stay on Groupon,” says Lynne Smit.
Last year Eric Miller bought a half-price annual ticket for the Table Mountain cable car, also on Groupon. “No snags. It was a straightforward, good deal.”
With more than a dozen deal-a-day websites out there, and more popping up, the choices of what you can buy are growing. And seasoned deal seekers know where to hunt down what, like kulula’s Daddy’s Deals for cheap flight tickets, OneDayOnly for electronic goods and accessories and SaleWine for discounted wine, for instance.
“The concept is pretty simple,” says John Lindenberg, director at VuvuPlaza, which is partnered by Independent Newspapers and has been running for over a year. “Vendors are approached by the site provider and encouraged to offer promotions or deals, the vendor’s motivation being to attract customers during down times and, hopefully, get repeat business.
“Marketing is expensive, and group online selling is a very effective and affordable way to do it. You are getting the attention of a big online audience. It started in the US with services only, and has now expanded into products.”
The group buying site takes a commission from the vendor – in the case of Groupon it is 50 percent, but the commissions vary according to the site. So, for instance, if a restaurant offers a 50 percent off a R200 meal, the restaurant gets R50 of the R100 paid and Groupon gets R50.
Groupon SA, one of the country’s top 25 websites according to the web information company Alexa.com, says its vendors enjoy exposure to a “large, highly responsive opt-in database of subscribers – a very attractive demographic of young urban professionals – that we have built”.
Groupon SA communications manager Kate Jansen adds: “Plus, there is the global power of the Groupon brand, which is active in 47 countries.”
But while it looks good in theory and many suppliers are thrilled with the results – the outdoor fitness programme Transform-Hers retained the custom of 60 percent of the women who recently bought vouchers, for instance – things can and do go horribly wrong for suppliers, because of overselling (offering too many discount vouchers to be able to honour, or so many that it becomes unprofitable).
One of the most extreme cases of overselling involved a cake shop owner in the UK who offered discount vouchers on Groupon last year. She had to take on extra staff to bake 102 000 cupcakes, making a loss on each one and wiping out her profits for the entire year.
It happens in SA, too, says Lindenberg, who knows of a spa in Pretoria that had an uptake of 1 200 discounted vouchers on another site. “Out of R80 paid for each voucher, the spa got R40 per hour-long massage. For hundreds of hours of massaging at that price, they made a complete loss.
“Vendors need to be aware of the quantities they can manage,” he says, adding that suppliers do get updated as to how many vouchers have been sold “so that they can call a halt to the deal if they need to”.
Jansen says Groupon collaborates with vendors “to structure a deal that makes sense”, and encourages them to “communicate with us and we will impose a limit if the vendor’s establishment has limited capacity”.
Consumers also experience the fallout of overselling. A look at consumer feedback site hellopeter.com, and it’s plain to see that suppliers who’ve sold through group buying sites sometimes fall into heavy delays delivering products, and that for popular services such as spa treatments you can end up waiting months for an appointment.
There’s also the “you get what you pay for” phenomenon at play.
“A friend and I bought discounted beauty packages,” says Tamara Oberholzter. “Her manicure and pedicure lasted a total of 20 minutes and involved no nail paint. I booked a package ‘worth R1 250’, but found that most treatments were well short of the normal times. I would not go back.”
On the other hand, on some sites, the deal might fall away because not enough people have bought in, but then the worst that’s happened is that you wasted a bit of time.
The WiCount site, popular for holiday packages and meals, says: “The deal only happens if enough people buy in. If not, no one gets the deal and you don’t get charged a cent.” That site encourages you to spread the word about deals, and offers you money credits for each friend or relative who signs up and buys what you referred them to.
Also, there may be dodgy suppliers or service providers, so it’s best to be familiar with the brand.
“I bought a massage treatment, but although the masseuse really knew her stuff, the premises were a house with an unmowed lawn and a dirty bathroom. Someone who expected a sterile salon or was given it as a gift might have been horrified,” says Georgina Guedes.
All in all, though, group buying sites are proving to be a breath of fresh air for shoppers looking for some fun or the odd must-have.
As Petro Kotze says: “It’s an effortless, really cheap way to treat yourself or someone you know. I bought an Indian cooking class through Groupon last year, and thoroughly enjoyed myself!”
Popular group buying sites:
* Groupon, www.groupon.co.za
* VuvuPlaza, www.vuvuplaza.com
* WiCount, www.wicount.co.za
* Daddy’s Deals, www.daddysdeals.co.za
* Ubuntu Deal, www.ubuntudeal.co.za
* OneDayOnly, www.onedayonly.co.za
* 24hoursonly, www.24hoursonly.co.za
* Collective Cow, www.collectivecow.com
* Skoop, www.skoop.co.za
* 247 Deals, www.247deals.co.za