THE BIRTH OF THE PROMISCUOUS SHOPPER

Several months ago I wrote about going off the coupon grid because I had found that my experiences had been less than favourable with Groupon and others. Yet in the midst of this, the Groupon phenomena continues to grow exponentially and I keep on listening to folks that I know who keep on trolling the "deals" and shifting from place to place -- wherever the lowest price can be found for a product or service they are considering. 

The demographics of Groupon are very interesting and it's no wonder that given my demographic that I ended up disavowing myself from it...as I am in the 11% from an age perspective. The startling facts though are that 68% of Groupon users are between 18 and 34, whilst a whopping 77% of the buyers are women, and as noted in the book the 80% Minority by Joanne Thomas Yaccato women are significant influencers in many of the buys that marketers would assume are male driven. So think that even the 23% that is male driven on Groupon is significantly influenced by women.

So if I was a marketer, a retailer, restaurant or a service driven organization that inevitably has relied on repeat business because of stellar service, product etc., I would be shaking in my boots. Because the up and coming spenders are price driven, deal driven and are, let's call them "promiscuous" shoppers, and women, well, not to be gender biased here, but the Groupon stats would indicate more promiscuity exists amongst female shoppers

Consider again the demographics 68% between 18 to 34 and 77% of women. Wow, somewhat unfathomable.

So what are businesses to do? Keep on offering continuous deals to bring people in the door? As I noted in my previous blog on this issue --

I know the local providers of services are thinking well, this might be a loss leader, but I'm going to get repeat business, so it's worth it. There has been research though that people who are motivated by price are always going to be motivated by price, so when you look to have them come back at the regular fees, well, they've already gone on to the next "like" company, which is offering the next great deal. 

And "aye there's the rub." Because when you offer a "coupon" the idea is always that it is somewhat of a loss leader and that you will make it up on other products or services that will be purchased as an add-on. And this may happen once-in-a-while, but in reality this new "deal" oriented population, that will not happen as much as would make the discounted items worthwhile. And furthermore, you are setting a new standard, lower price for your offerings. Which means that once you offer a manicure for $20, you can't quite honestly expect anyone to pay $40 the next time they show up, do you? I'd be out the door and going to the spa down the street that has it on for $20 this week.

I guess in one way it is great for consumers, however, what it means to businesses, who knows? The discount trend started with a lot of the big box stores which proliferate the landscape -- you know the ones which many love to hate? But they have their loss leaders in the middle of the store and I don't know about you, but I am exactly what those stores are counting on...a "browser" who ends up in the exit line at Costco with a brimming cart when I only went in to replenish my coffee and water supply. And by the way, if you really did your math on a lot of the product offered in the "Giant" size..you would find that the price differential of the amazing deal, was almost the same as in a regular store. 

At the end of the day, I don't know what this means for the future. Promiscuity is going to be hard to contain. The sticking with one parter is obviously left to the older demographic. The younger demographic will be constantly looking for the next best option!

CONSTRAINING SUPPLY AS A MARKETING ADVANTAGE

Surprise ... there is enought H1N1 vaccine available to inoculate everyone. In fact there is more than enough supply...but guess what...no one is showing up anymore.

From the hours and hours line ups...vaccine inoculation centers are now shutting down, because why have a party if no one shows up?

So what changed? Surely the so-called hyped up threat of this flu didn't change...there is still a reasonable amount of fear mongering out there. But what did change is that the supply is now abundant...so the cachet of being able to say, "I got my shot even though there is hardly any out there" is gone. If everyone can have it, then it isn't special anymore.

Marketers have long known constraining supply is a great way of creating frenzy and sales. Just look at the Christmas insanity of people lining up each year for the particular "must have" toy of the season. Whether Tickle-Me-Elmo, Nintendo Wii or this year's Zhu Zhu pet....constraining supply, creates hyped up demand, and so the braggarts among us can lament about the hours spent in line, or bragging about how they got the "last one" of something.

But truly, there is a tremendous amount of manipulation that goes into this. As someone who understands demand forecasting...don't tell me that the official line of these companies "well, we didn't know how popular this would be" is true.

Think of the psychology behind this. When you go into a store and a sign says "Only 2 per customer", don't you immediately think...well this must be a great deal if I can only have 2, and so even if this item wasn't on your list, there it ends up in your cart. Or how about "Limited Time Only", or "If you buy this is the next 90 minutes, you also get this never to be repeated again deal"...of course never has a whole new definition in the marketing world.

So before you go loading up on things you don't need, understand that advertisers have psychologists on call and they are capable of manipulating you into buying things you don't even want.

And as the Borg said on Star Trek Resistance is Futile!