Social Buying: The modern day coupon is here

It’s time to put down that grocery store circular, the modern day coupon has arrived!

I read this article on Mashable yesterday about Groupon‘s biggest one-day deal to date, which was a Gap deal where you get $50 of clothes for $25. For those of you that are not familiar with ‘group buying’ it basically is a new trend of getting a discount when a certain amount of deals are purchased online in a certain amount of time. Group buying sites encourage users to share the deal on other social sites in order for the deal to become active.

There was one part that really stood out for me, in response to whether the campaign was a success:

“With the current sales of around 300,000 Groupons, that translates into a $7.5 million revenue loss for one experimental campaign. That’s a hefty lump of cash, and the deal isn’t even over. “It’s still a better use than wasting $7.5 million on TV ads.” Fou added, “At least they did capture the other half as ‘money spent [by customers],’ and consumers will eventually go into the stores. For TV advertising, there is never proof anyone ever saw it, let alone went to the store.”

This is HUGE. You’ve got people buying the coupon and it’s your advertising. With a newspaper ad, you are banking on a potential future action which may or may not happen. You are hoping that people will remember your product/service and (eventually) head out to the store and (possibly) buy it. Same goes for radio or newspaper. Repeat the message enough and you may just get the message across but how do you calculate the ROI on that?

With group buying sites, the vendor already has the customer coming to the store since they have purchased the deal and once they are there they may potentially spend even more. Sure, part of the deal revenue is shared with the group-buying site but when is advertising ever free? You have to spend money to make money, right

For local businesses still stumped on how to get in on the social media action, sites like Groupon, Steal the Deal and a plethora of others are the perfect way to jump in and get actual visitors into your store or trying your service.

Even if they miss the deal, customers can still browse past deals (but are no longer active) and as a result, you are still getting exposure for your business even after your campaign is over. This was how I first came across a new burger place in my neighborhood. I have since been back two times.

Mom (and Dad) put down the scissors, put down the circulars…the deals are all online.

Have you tried social buying yet? Get any good deals?

Update:Here’s an article on Social/Group Buying in the Montreal Gazette from September 4th, 2010.