American Apparel, Nordstrom @ Groupon, Apple @ TJ Maxx!? [Screenshots]
4If anyone thought that the flirtation between Groupon and national retail chains (Gap, The Body Shop) was but a temporary tryst, two new deals point to a more enduring romance, as the group-buy social commerce platform evolves to remain competitive with Facebook Place Deals.
Yesterday, fashion retailer American Apparel began a three-day Groupon deal, with just 100 shoppers needed to tip the deal live. And today, department store Nordstrom chain is running a 4 day deal for its Nordstrom Rack sale stores, again needing just 100 buyers to tip the deal (which happened 14 minutes after the deal went on offer. By midday on day 1 Groupon had raked in $132,000 for the deal).
Both the deals propose the familiar 1/2 price offer – buy a $50 store credit coupon for $25, a great headline deal worth talking about, that is, worth “liking” (393 people have liked the Nordtrom deal so far). With an average social graph size of 140 – that means the deal has been advertised for free on 55,000 walls). The more we think about it, the more we see the Facebook “like” as “one-click word of mouth” - word of mouth without the effort or risks for business (content control).
But what caught our social commerce attention today was neither of the Groupon deals, but the fact that Nordstrom’s competitor, designer discount store T.J. Maxx is running a very buzz-worthy sale event beginning today – selling the Apple iPad at $399 – 20% off the price in Apple stores and pretty much everywhere else.
Now, what’s interesting about this is that if the purpose of Groupon is to boost footfall – bring people to the store with deals worth talking about and that get talked about, then T.J. Maxx’s sale stunt (and sister company Marshall’s who are running the same deal), is a viable and low cost alternative to Groupon. The Facebook buzz for the T.J. Maxx deal far exceeds the American Apparel and Nordstrom deals together and probably costs the retailer a whole lot less (each store store will apparently be receiving 100 iPads per day).
Lesson for social commerce? When it comes down to it – social commerce is not about technology, it’s all about word of mouth; when you offer something genuinely worth talking about, then a like button is maybe all you need.
The future of social commerce; social layers rather than social platforms?
Pingback: Tweets that mention American Apparel, Nordstrom @ Groupon, Apple @ TJ Maxx!? [Screenshots] | Social Commerce Today -- Topsy.com
Pingback: American Apparel, Nordstrom @ Groupon, Apple @ TJ Maxx … | apparel blog
TJ Maxx practice of offering ipads at a discount is an old advertising method called lost leading. They bring in traffic with the iPad and try to drive additional revenue from other offerings. The problem is that the offering only appeals to a limited subset of customers who are interested in and willing to buy ipads. I think this is somewhat similar to what Groupon is doing, but the distribution is on a totally different scale. Groupon sent out an advertisement that hit MILLIONS of inboxes and was bought by over 100k people each. The business were able to be paid upfront for merchandise that will most certainly be discounted and must be redeemed within the next 3-4 months. Given the average item price they will also drive additional value from in store purchases.
Pingback: Speed Summary + Book Review | To Group Coupon on Not – Insights for Brands | Social Commerce Today