Group Buying vs. Social Buying

“Group Buying” was an idea that first surfaced during the “dot com” boom and ultimately failed to build any momentum. The idea is again gaining popularity in the era of social media where scalability can be introduced as aggregation cost diminish on applications such as Facebook and Twitter.

Ditch the gatekeeper, axe the marketers, lose the spam.

My first reaction is to find the most unsavory business transactions today and eliminate all the unnecessary middle men and their costs, gateways, noise pollution, and inefficiencies.

Why can’t there be one cell phone store where I can buy anything for any mobile device? Why do I have to pay to use my credit card and pay to not use my credit card? Why am I still treated like a terrorist precisely when I am doing everything that I can to avoid terrorists?

There are some glimmers on the horizon.

Applications such as SocialBuy, Groupon, and Living Social, use their social media platforms that offer vouchers for steep discounts on a variety of goods, once a minimum threshold of consumers is reached. People have an economic incentive to promote products in their social network (on Facebook and Twitter) in order to reach those thresholds more rapidly and consistently.

Social Buying

Suppose the group buying experience could aggregate packages of products. Strategic products would then be aggregated as “A Network of Products” that together increase net value. Yes, you heard me…a ‘combination of products’ with Twitter followers. A zip car, a movie ticket, Segway rental, and a dinner coupon could be aggregated into an entertainment / shopping package.

This is not so strange.

Apple’s enduring success is very much a model of commercial social aggregation. Nobody can compete with an iPhone without also offering iTunes, iMovie, iPad, and all the social trappings of the iStore. Perhaps Google, with its social commercial network can compete resulting in a duopoly. Group buying can empower the smaller players and bust monopolies in an infinite array of combinations.

Why not air travel?

The door-to-door travel time and social cost to fly between two small cities, say, 500 miles apart using commercial airlines is greater than just driving. There is no other alternative, sans high-speed rail, and the economic result is that the two cities remain small with very little new commerce or diffusion of new ideas that air travel benefits a region. People just don’t travel much between, say, Omaha NE and Cheyenne, WY.

Yet, small city pairs within 500 miles have strong extended family roots, migration patterns, and social network density. It would be relatively easy to offer Group Buying on a 20-25 seat private airplane for less than the cost of driving; and in 1/10 the time!

The travel package could include ground transportation, shopping coupons, and maybe even a A zip car, a movie ticket, Segway rental, and a dinner coupon could be aggregated into an entertainment / shopping package.

Every small city economic development agency in the country should be in this business of building social networks and matching them with product networks between other small city pairs…

1 thought on “Group Buying vs. Social Buying

  1. Social shopping is a great way for shopping while relaxing on your couch, now  it’s not only shopping are actively participating by writing reviews or by voting on the best style, it’s not like the old fashioned web shopping where you had to skip from site to site, you can now get all the products at the same place,  also you can see others review about the products…anyways I had no knowledge about the Group buying, I didn’t know  that it  actually started so many years ago..really nice post

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