As a busy research associate at Colliers International in Toronto's financial core, Scott Conly spends a lot of money on eating out. Lately, though, he's been getting many of his meals for half price. And it's not because the 24-year-old belongs to an exclusive club. Rather, he chalks up his recent savings to a new online phenomenon among the bargain hunting set: Web-based collective buying.
Say goodbye to the days of rifling through piles of paper fliers armed with scissors. A growing number of "group-buy" ventures deliver daily deals, straight to inboxes, on everything from high-end restaurant meals to cupcakes to helicopter rides to tire rotations.
"In this generation, this is the new coupon," Mr. Conly says.
This coupon, though, comes with a rapidly ticking clock and a little bit of peer pressure.
Sites such as TeamBuy.ca, GroupOn.com and StealTheDeal.com function on a city-specific basis, offering a discount for a limited time on one local service or product per day. In the past few months, the phenomenon has spread quickly throughout Canada, with more than eight group-buy operations available in Toronto, and many in the process of expanding into other cities.
In the morning, subscribers receive an e-mail featuring the day's deal, with information about the business, the actual retail price, the percentage discount and the minimum number of people that have to buy-in for the deal to pass. On June 28, for example, at least 20 people had to buy-in to TeamBuy's offer of $20 worth of food for $10 at Sip Resto Lounge in Vancouver. A digital clock on the page counts down the amount of time left to get in on the deal. When time runs out, typically after a day, everyone who has bought-in gets a voucher to redeem the product or service.
"The first site I found out about was TeamBuy.ca, probably on Facebook or something," says Sarah Stallan, a project manager at Chubb Insurance Company of Canada in Toronto. "Then WebPiggy.com, then it just kind of spiralled out of control." That was four months ago: Now the 27-year-old also subscribes to Canada-based StealTheDeal, WagJag.com and TeamSave.com, and the U.S.-based GroupOn and GroupClick.com. She's introduced her roommate and friends to the sites, and got her sister in Vancouver hooked, too. She's also discovered a service called DealRadar.com that aggregates all of the daily deals in Toronto into a single e-mail.
"To me it evokes images of Tupperware parties. It's sort of a modern version of these sorts of interpersonal sales," says Michael Mulvey, assistant professor of marketing at the University of Ottawa's Telfer School of Management.
The comparison is pretty apt, considering group-buy ventures rely on social-media sites such as Twitter and Facebook - pre-existing networks of like-minded people - to generate hype about a deal. Their websites also encourage chatter, providing forums in which people can ask questions about a deal or a company, post reviews and discuss their experiences after cashing in a voucher.
Prof. Mulvey says one of the reasons group-buy ventures appeal to people is because of the perceived exclusivity of the bargain. "When you pull it out of your Penny Saver flier, it's not a great deal, everyone's getting it. This is almost like being an inside trader, having access to deals most people aren't privileged to."
The sites, which are free to join, often feel like clubs, with employees posting their full names and pictures and responding to consumers' queries personally, and extra incentives - advance notice on deals, contests - doled out to subscribers who become Facebook fans and Twitter fans.
When Debbie Watson, a nurse living in Hamilton, first subscribed to WebPiggy, they sent her tickets to Yuk Yuk's just for signing up. Later, they sent her special vouchers in exchange for retweeting a deal, the 51-year-old says.
Most of the group-buy ventures aren't Hamilton-specific yet, but that doesn't stop Ms. Watson from checking out the daily deals offered in nearby cities. Her most recent purchase was a half-price facial at a hotel spa. "On our next trip to Toronto maybe, we'll take in the theatre and I'll get some me-time in."
Lindsay White, 26, lives in Nova Scotia but spends a week or two in Toronto about once a year. Over the past few months she has subscribed to a host of different group-buy ventures with the "whole idea of trying to make my next trip more cost-effective." She ended up buying more than 10 deals, including an $11 speedboat ride in Toronto's harbour called Shark Attack.
It's one thing to spend money on deals you'll use up on a holiday, but what about people who are generally impulsive buyers? Will these sites with their ticking clocks influence people's purchasing behaviour? Absolutely, Mr. Mulvey says. "You can't defer the purchase. To a prospective buyer, maybe the rational side of their brain is saying we should wait until the next paycheque. … But since it's for a limited time only, maybe we'll forgo that and have some Kraft Dinner for a week and buy our new whatever. People think of it as saving money, but it's kind of an ironic thing to save through spending."
Ms. Stallan, who is a self-described bargain hunter, says it's a matter of being selective. "The clock adds a little pressure, but if you put your thinking cap on, you can buy stuff you would normally buy and get really good deals."
She now makes a purchase about once a week and says she hasn't regretted a single purchase - not even a voucher she bought for a boot camp she didn't end up liking. "I didn't like the instructor, but the deal was so ridiculous - $30 for something normally $200."
Still, she admits there was a learning curve.
"In the beginning I was a little intense about it, buying three or four things a week," she says. "I have a million restaurants I have to go to in the next while."
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