Groupon has opened a retail store in Singapore, primarily because of the market’s small geographic size, something that can be applied to the countries in the Middle East as well. The Groupon officials state that since Singapore is so small, with strong online purchase penetration, customers are comfortable walking down to a Groupon Retail store and physically experiencing and evaluating the product and then redeeming it there and then.
Delay in delivery of products has recently been the cause of great furore for Groupon Middle East due to logistical issues. Back in March 2012, there was quite a media frenzy with customers complaints going all the way up to the Dubai Government. A retail store would definitely help alleviate such issues.
Group buying sites are rapidly becoming a part of our daily retail purchases. Regional players like Cobone and Living Social are rapidly gobbling up market share, enhancing their revenue and giving Groupon a tough time (Living Social set records for online deals in Lebanon in Nov, 2011 and Cobone claimed a 70% market share last year). An element that still remains somewhat of a nuisance for the customer is the quality of the product that gets delivered. Unlike companies like Amazon where the reputation of the vendor is impacted greatly by the reviews it gets from customers, group buying sites usually have one off deals with vendors and no control over the quality of the product. I recently experienced this myself, when I bought a computer table through one of the sites and it turned out to be a rickety piece of bad craftsmanship. I was told by the personnel at the site that they are mere facilitators and it is up to the vendor to maintain the quality and adequate levels of workmanship. They did however agree to escalate my complaint to the vendor and ‘expected’ a response from them in the near future. Such an issue might get resolved with the presence of the retail store, but yet again, does it work out favorably in terms of a business model, is a question that has to be answered.
One thing worth acknowledging is the strong presence of these sites on social media. They respond to customers on Twitter and Facebook in a rather timely fashion. Keeping this dialogue ongoing helps to keep their customers engaged.
But one thing worth acknowledging is how these sites have changed the game for retail shopping. It is human nature to stick together as a group. This is working in a profound manner when it comes to shopping!