In follow-up to last week's post on social shopping I wanted to spend a bit more time on Groupon. 

Social shopping is a form of social networking where consumers and/or retailers aggregate and share information about products, prices and deals.

Groupon is a group buying site that, according to their website, "features a daily deal on the best stuff to do, see, eat, and buy in a variety of cities across the United States." 

For example, today's San Francisco deal is $50 for a kids photography session at a studio in the city.  The normal price is $295, so the savings is substantial.  So far, 647 people have signed up for the deal.

For small businesses Groupon can be a great way to find new customers.  And unlike a traditional coupon or offer, when a Groupon customer walks in the door, they've already paid for the product or service.  Although the small business pays a cut to Groupon, the commission is only paid if a sale is made.  It is an understatement to say paying only for performance is an attractive form of marketing. 

As we said in our prior post, the growth of social networking is driving the growth of social shopping.  It is becoming easier for cooperative groups of buyers to band together to guy things.  It is also becoming attractive to companies to offer social shopping services. 


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