The group buying industry won’t grow unless it innovates and starts taking advantage of customer databases in new and interesting ways, according to new research.
Telsyte senior research director Sam Yip says while the industry’s growth has been massive over the past few years; it’s time for some of the biggest websites in the country to step up their game.
“The industry is ripe for the next wave of growth,” he says.
“What we’ve found is that if companies are doing the same things they do now, then they’ll continue to do well. But if they want the market to keep chugging along, if they don’t do anything we won’t be seeing the same sort of outlier growth as in the past 24 months.”
Research by Telsyte has found the group buying industry generated $123.5 million during the March quarter, up by 72% on the same period last year. But the market actually contracted 14% from the previous quarter, due to seasonal issues and the overall number of market participants.
Smaller sites have failed as larger, more established businesses take over.
The research also found the industry is now a key contributor to the ecommerce industry, with $690 million worth of goods and services purchased over 14.5 million group buying vouchers.
Yip says the next phase of group buying will be built on personalisation and these companies taking advantage of the huge customer databases they’ve built up.
“I think the next 12 months will see a lot of businesses spend time cleaning up their databases, segmenting their customers and then allowing services to match and marry deals against their customers more accurately.”
Some of that innovation will include the use of location-based mobile coupons as well, Yip says.
He also points out some businesses are getting ahead of others. Scoopon received a massive boost in the March quarter, due to a deal it ran with Hungry Jack’s that set a record for Australian group buying – it sold 675,000 vouchers, netting the company over $1 million.
Yip points out a few other trends hitting the industry, including the growing number of deals that require a higher price than usual.
“Your travel deals used to be about $500 to $2,000, but now we’re seeing deals upwards of $5,000 selling on these sites.
“So there’s action here in the market. If the market stagnates, there is still going to be a lot of money turning over every month. But if they want to get to that next level, there will need to be more done. It’s ripe for growth.”