In a recent post about Team Buy, I said the market is shut airtight with Groupon and LivingSocial. I was proven wrong today! Google has just entered the market with Google Offers. Google Offers will use Google Checkout as the platform and tie in other social sharing tools such as Facebook, Twitter and all that. What’s interesting is the payout policy of Google Offers. 80% will be paid to the merchant within 3 days, while the remaining 20% kept for 60 days to settle any disputes. Interesting model – since as a merchant you get the bulk of the cash within a few days. Google has a better chance of monetizing this market since it has huge brand appeal, technology and a loyal user-base. This is the main issue with group-buying: lack of loyalty. Visitors are very keen to look for best offer, regardless which site provides it. For example, look at the clickstream traffic leaving TeamBuy. See how 4 out of 10 visitors go to competitor sites ( Wagjag, Groupon and LivingSocial, etc.) Group-buying users are price-hunters and likely to jump ship if they find a superior offer elsewhere. I bet merchants also see this type of behavior from group-buying customers. These customers likely bail when a better offer is available from a competitor merchant. What’s quite exciting is the geo-location integration into social-buying. We saw that last October with Facebook Places and GAP jeans promotion. But imagine how LBS apps (Gowalla, Foursquare and Flowd) can be used in the social-buying market. No more mayor badges but real discounts because you and a group of friends ended up at a store, pub or a club together. Awesome!
Originally posted 2011-01-21 13:06:04.