Get Your Groupon!

I first heard about group-buying platform Groupon early in 2010, when someone asked me to do some research on it at the company I worked for at the time. That day specifically had a deal for a spa massage for like 75% off. I wondered what the catch was at first, but then I figured, why not? If I lose out on $30, it's only $30 (of course, tell me that when I lost my job a few weeks later...then again, I needed that damn massage).

Groupon is the newest technology darling in the smartphone app/social networking, although it's been around for a few years. It's exactly as it sounds: it provides coupons for groups, essentially, with the power of group purchasing. Let's say that a restaurant is offering $30 worth of food for $15. You and a bunch of people "buy into" the deal, and then show your Groupon at said restaurant (by printing out the voucher or simply showing your phone to the server) et voila! Competing websites include Living Social, Bloomspot, and KGB Deals.

Warning: Groupon can be habit forming. In my quest to be active but not be tied down to any one gym, I have been purchasing Groupons, Living Socials and KGB Deals for abbreviated gym memberships, training and boot camp (yikes!). I am having trouble keeping track of how many I have.

Groupon recently turned down a very lucrative offer from powerhouse Google, for $6 billion! One must wonder what their long-term plans include, potentially going public, but for the time being felt they were being undervalued...UNDERVALUED!...by Google's offer. Within a month's time, however, they received an injection of financing valuing them at $1 billion from Kleiner Perkins. Other financiers Greylock Partners (which include the dudes who run career website LinkedIn) wrote a glowing review as to why they invested in Groupon.

At the root of it all, not only in the power of the group buying mechanism, is the power of the group data. I don't think it takes a genius to realize that mostly women are going to purchase bikini wax groupons, and maybe men will buy rock climbing groupons (though to be honest, I know some women who will do that).

It ties into the whole privacy issue once again. Although Groupon, Living Social and their investors aren't doing anything that hasn't been done in a more clandestine manner. Back in the day, supermarkets started dispensing "club cards" to give you savings on their sale items, but used that data to track what was being sold in bulk, and to negotiate with distributors to sell at a lower price. This data is incredibly powerful and valuable (take it from me -- I worked with research departments for several years).

I find it funny that Groupon and Living Social are targeting the New Years Resolutioners with nutrition, wellness and fitness deals. I mean, it doesn't take a rocket scientist to realize that people are going to commit to going to the gym. But to me, it's a win-win. While places like New York Sports Club are going to lower their initiation fee to $1.11 to lock you in for a year, Groupon and Living Social are giving as close to a non-commitment guarantee to go the gym...

Of course, that's not to discount what the vendors are getting out of it. They are getting foot traffic, referrals and potential new business. I am almost dreading the subsequent sales pitch I am going to get at these places once my Groupon is up. I have a hard time saying no, I mean how can one say no to fitness? Then again, I figure I am covered until July or August of this year with fitness deals, and by then, there may be more.

Groupon is a company to certainly keep your eye on, but hopefully they don't get too big for their britches...and we can still get cheap spa treatments, gym memberships and happy hours for our enjoyment.