January 30, 2011

Anyone who has been paying attention to “what’s hot online” lately has undoubtedly heard of the new craze of group coupon sites. For those of you who haven’t heard of them they’re basically coupon sites that anyone can sign up to as long as you have an email address. These social coupon sites send daily deals to your email for up to 90% off of merchandise from stores in your community.

The catch is the deal doesn’t happen until a certain amount of people have purchased the deal. For example; on the largest and most talked about group coupon site Groupon the deal in my city of Windsor, Ontario today is $36 for Five Fresh Gourmet Meals from Great Foods Goddess, but the deal wasn’t “on” until at least 10 people purchased it which happened at 7 this morning.

These sites are incredibly successful so far. As I said earlier the most popular one is probably GroupOn, followed closely by Living Social, Wag Jag and a plethora of others that I probably haven’t even heard of. Why are there so many of these sites? They’re incredibly easy to clone and create and company after company is quickly trying to jump in. In fact, these sites are so successful that Google tried buying GroupOn late last year for over 6 billion and GroupOn turned them down. Now Google has decided to launch their own coupon site, but are they too late?

How many of these group coupon sites could one person really keep track of? I’m personally not currently signed up to any of them, but I couldn’t imagine getting emails from more than 3 or 4 of them and checking them on a daily basis. Eventually, I’d just get annoyed. It seems to me that being early in the game is the way to be successful in the coupon business. The earlier you started the more users you’ll have in your system. The more users you have in your system the more sales your merchants will get. The more sales your merchants get the more likely it is that they’ll come back.

In my opinion, the only way for new comers to get a footing in this business it to focus on cities and towns that the bigger sites haven’t gotten to yet. They better hurry though, my city has a population of just over 200,000 people and there are already group coupons available from GroupOn, Living Social, Wag Jag and Swarm Jam.

What do you think? How many group coupon sites are you signed up to? Do you think there are too many already? Will the new ones actually gain a market share? Comment and let me know!