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29/11/2010 by

What Offline Retail Can Learn From Groupon?

Retail has been stuck in the middle between brick and click for over a decade now. Maybe below tips and tricks can help them to break free from their assumptions, so they can finally unleash the power of digital to boost their brand and business? The fact that consumers are going gaga for Groupon might be that eye-opener.

Most retailers ignored Google for the first 5 years or more. The most heard reason for ignoring Google: “We do not have a webshop, so why should we be high ranked in Google?”

Fully forgetting that in that period 5 out of 6 consumers with purchase intent looked for products in Google, that they would next buy in the nearest offline retail store.

So based on their own assumptions, many retailers missed out on great sales opportunities over and over again.

Groupon (Deal of the Day) is one of America’s hottest brands in 2010. The Chicago-based online company started 2010 with 125 employees and today counts more than 2,500 staffers worldwide who arrange, write and send its deals-of-the-day emails to an exploding subscriber base.

In less than a year, Groupon swelled from 3 million subscribers in the U.S. to 25 million subscribers in nearly 30 countries around the world, including Mexico, Brazil, Japan, Russia and Argentina.

While Groupon started out as a way for consumers to find neighborhood deals on manicures and pilates classes, it fast attracted interest from blue-chip marketers looking to goose sales using flash coupons.

September 2010 marked Groupon’s first national promotion, a partnership with Gap that sold 445,000 coupons for a total of $11 million.

There are more national partnerships with retailers, restaurants and travel companies to come, and it’s not stopping there.

Groupon has built its brand organically, via advocates endorsing the service by word-of-mouth and online, but sometime in the near future there may be traditional advertising techniques.

It’s popularity is the social nature of each offer: subscribers are encouraged to share promotions with family and friends, and many of the deals are not only for products but experiences.

And yes some retailers have discovered the power of online coupons to drive offline retail sales. The success of Groupon is inspiring a crop of imitators, including Walmart, which recently launched a Facebook-based app called Crowdsaver that unlocks discounts once products get enough likes.

So I do hope Groupon will inspire many other retailers so they are finally convinced that online can really drive retail sales.

10 Other tips I have for retailers:
1. Start your online shop today. In 10 years 25% of your revenues might come through digital channels.
2. Start your own opt-in datase and send out special deals to loyal buyers every 2 weeks.
3. Start a Twitter page and offer followers your special deals (look at Dell).
4. Go beyond loyalty programs and embrace Social CRM.
5. Start a Facebook fanpage, and offer tour fans samples and special offers.
6. Start on Foursquare and test it for your stores.
7. Embrace Facebook Places, which might be the Foursquare for the masses.
8. Try the advertising opportunties in Google Maps and Google Earth.
9. Create a mobile site and iPhone App to get more traffic to your retail stores.

10. This is my most important tip to retail brands:

I do understand you want to embrace channels/apps/services that have reached critical mass already, in order to reach the maximum number of buyers.

But please take a look at this from the other side as well: Why not trying new things, when they are still very new, niche and below the radar.

Why would you consider this advice?

One: Because digital channels do offer more interesting clients, that will buy more products and will cost you less in terms of webcare and customer support.

Would you rather have well informed customers that are easy buyers or expensive clients that buy less but will need more of your expensive services and support?

Two: Because by tapping into channels/apps/services in the early stages, would enable you to learn and improve your skills and presence in front of a small audience. And that would be really smart.

Because, if you step in at the moment these services (i.e. iPhone or Foursquare) have reached maximum uptake and are mainstream already, you will make your first mistakes in front of that large audience. Not really smart, because in front of the masses you would like your brand to shine like a star, not fale, right?

So practice when it’s still small. This way, you will hardly ever damage your brand reputation. Because people will be gently with you when you embrace innovation and technology in a very early stage. They will even help you and give you tips how to improve your stuff…

If you are a laggard, step in very late and then still make beginners mistakes, online consumers AKA digital dictators might just attack your brand and say you are a hopeless old fashioned and outdated brand.

One that does not really understand consumers’ needs at all. Well, if consumers would feel about your brand and products this way, why would they ever consider to buy one of your products?

Last but not least my dear retailing friends: Tapping into innovations, technology, features and apps in an early stage, has earned these companies not only a very innovative brand image, but also earned them loads of free publicity! So, why wait?

What About You?
If you have other tips for retailers, please post them below.

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Groupon source: AdAge


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