Using Social Media in Group Buying Websites

Group buying is an inherently collective and social experience. A major issue about the group buying model is customer retention. A long term relationship is hardly established between these small business and Groupon due to lack of brand loyalty as consumers are just obsessed with the high discounts. Once consumers have used the coupon, they are unlikely to return to the company that offered the deal. As a result, a chain effect will

occur; where small businesses partnering with Groupon will diminish and customers would stop visiting the websites due to lack of offer.

To tackle this issue, it is recommended that group shopping services start developing and emphasizing social behaviour and the construction of an online community of group buyers, affiliated to a given brand. This should increase brand loyalty, increase traffic, improve sales and enhance user satisfaction as well as frequency of visits. This issue can be fulfilled in several ways. This includes:

• Group shopping websites could let buyers share their identity through improved, customizable and public user profiles, where group buyers could share some personal information about their personality and consumption interests.
• Set up a feedback page that allows consumers to provide comments and ratings on the business that had offered a deal or on the product that was sold.
• Group shopping websites should allow users to post comments or user reviews on specific products or product categories. This should be helpful to other users to improve the overall quality of the service as long as it is moderated and let users express themselves as it is terribly lacking on today’s group shopping platforms.

This feedback feature is useful to companies and adds value to the service. In the businesses’ perspective, companies with good ratings and comments should have a higher probability of partnering with Groupon to advertise in the future because they know their products are popular. Companies with poor ratings are expected to be eventually driven out of the market, unless they take into account customer feedback and improve their products.

As for the consumers’ perspective, this allows them to filter through companies and choose their deals more efficiently. It should also increase their trust in the intermediary and in the products offered because of past feedback. This recommendation would thus be effective for each sector involved in group shopping; therefore, leading to a long term relationship and ultimately, beneficial for all three sectors.