The Viability of Alternative Online Sale Platforms

As a longtime subscriber to online coupon e-commerce websites, such as Groupon and LivingSocial, I was excited to see an article in the December 2010 issue of Wired Magazine about the online discount consumer culture and how this emergent phenomenon came to be. Obviously there is enormous potential regarding using these sites to deliver attention and business to Mosmann via unconventional channels.

 

Basically, online discounting sites have amassed a huge following of several hundred thousand consumers that subscribe to their email lists. This services contract with companies to offer products and services discounted by 50% or more. Of the remaining 50%, the company keeps half and the online service keeps half while delivering thousands of purchases, new customers, and hopefully future business. According to the article…

“[Groupon and LivingSocial] encourage impulsiveness and experimentation, harnessing the ever-shifting, gamelike terrain of the online dealscape, offering users not just a collective price but a collective buying experience.”

Not only would online coupon sites – such as Groupon and LivingSocial – offer Mosmann enormous exposure, but also the opportunity for consumer trial on a massive scale. This could be a great opportunity to further both of those marketing objectives. And besides, according to Groupon’s CEO Andrew Mason, as quoted in the article…

“the most effective coupons aren’t the ones that save you money on things you’d buy anyway; they’re the ones that come from out of nowhere, giving you license to buy something you otherwise wouldn’t.”

At a quick glance, there are pros and cons and even more questions brought up when considering emerging secondary ecommerce channels for Mosmann:

Pros-

  • brand exposure to hundreds of thousands of potential consumers
  • lots of new, almost entirely US business
  • potential future business
  • free advertising to online retail service members
  • would garner attention and Mosmann website traffic (click throughs)

Cons-

  • economic gamble in exchange for an indeterminable number of new customers
  • surge in demand potentially could overwhelm company and lead to negative brand attitudes among consumers
  • must sell product for at most 25 cents on the dollar
  • may affect positioning of the brand

Questions-

  1. What would be the specific terms of an agreement (ex. caps, time frame, etc.)?
  2. Can Mosmann handle demand?
  3. How many people will see the deal? And how many fall within our target segment and are likely to buy? Is this even predictable?
  4. Can Mosmann afford to sell at 75% discount?
  5. Realistically, what’s the likelihood of repeat customers and future business?
  6. How do using secondary e-commerce sites affect Mosmann’s positioning?

 

All these questions will have to be answered before we can make a decision on integrating secondary e-commerce sites as purchasing channels and for awareness creation into the overall strategy. But, it is most definitely something to consider.

 

-Jillian Blazek, Media Director

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