Community shopping: who can benefit from it?

About six months ago, the first social shopping websites were launched in Hungary, and since then dozens of them have been offering group discounts. The topic itself is becoming increasingly popular, with more and more articles, presentations and forums on the subject, so NRC conducted a survey focusing on social shopping.

I first published the results of the research on the Nettimes blog (the post appeared on Saturday), and last night I had the opportunity to discuss the topic as a member of the radio show's panel.
During the discussion, it was also raised - but Konrád also pushed the question - who actually benefits from social shopping? The customer can benefit - with discounts of up to 50-60% on restaurant dinners, leisure activities or even beauty services - but the seller (the service provider) can also benefit, generating demand through the promotion and introducing their service to people who might never have tried it without the promotion, but who will return later as satisfied customers without the discount.

Let's look at the consumer side first. The results of the research show that more than 90 percent of those who are already experienced in group shopping think that taking advantage of group discounts is a good way to save money; in contrast, the vast majority - at least so far - do not feel that they are actually spending less; in fact, one in three to four shoppers are spending more than before since they started using the "wallet-saving" group shopping option.

The explanation is of course obvious. Pioneers of social shopping are typically internet users who are open to new things - whether it's a new form of shopping or even new products and services. Most of them agree that social shopping tends to make people want to try new things, including things that they would not otherwise try if they were not offered at an unmissable price. In addition to the novelty and the fabulous discount, I believe that the social aspect is an important element of this new form of shopping, even if the shoppers do not know each other. Just as we prefer to go into a crowded restaurant rather than one where only bored waiters stand around, we also have more confidence (and, of course, more affection) for a service for which hundreds of our fellow netizens have already signed up.

As for the supply side. I have heard it said in several places that, while it is not a bad thing for operators to have social shoppers visiting them just for the offer, their real aim should be to get them to return - and there is little chance of that, as the keen online customer will thank you for the discount but will not go back, preferring to find another discount elsewhere.

Well, this assumption is not entirely borne out by the data, as three quarters of social shoppers - despite the fact that most of them have only shopped 2-3 times - have already found a service they liked enough to consider using it at full price - and more importantly, nearly a fifth have already returned to the place where they did it.

Of course, the long-term prospects for social shopping are another question. I've heard it said that it's just a bubble that's being inflated and will burst, perhaps not too long afterwards: the enthusiasm will last and the market will grow for a while, but then it will quickly fall back - either because consumers are tired of it or because the supply side realises that it's not worth it.

Of course, to be able to talk about balloons at all, there still needs to be a significant increase in the number of users. Less than 6 percent of adult internet users have tried social shopping so far - most of them only a few times - but they are likely to remain open to online action-hunting in the future. Around 20% of the rest are likely to try group discounts within six months. Based on this, I estimate that by the end of the year, the share of social shoppers among adult internet users will be around 10-12%, which is roughly 400,000 people.