Why Did Online Shopping Fail?

If I ask you, in the past year, Internet What's the most popular word? micro-blog That is Group buying Now. In the first few months since the first group purchase website was launched in March, the number of group purchase websites has increased to 1726. However, this rising tide is rapidly disappearing. A lot of negative news has cast a shadow over the form of group buying. Today, we talk about the reasons for the decline of group buying.

The significance of group buying lies in the combination of multiple consumers to achieve a large number of purchases, resulting in a substantial discount. At the beginning, it often appeared in real estate, home decoration and other physical commodity sales activities. Consumers can get a certain amount of discount by saving shop costs, logistics costs and large purchases. Although the discount rate is not large, consumers purchase high value, so that consumers can still save a large amount of money in absolute quantity.

By 2010, the popularity of group buying began to extend to the service industry, such as catering, leisure and other industries. The buffet at the original price of 200 yuan, the group purchase price as long as 68 yuan. A yoga course can also play half off or even seventy percent off. The huge discount rate caught the eye of consumers at once. Group buying has become popular. However, there is a deep reason why group buying will decline rapidly.

First, for the service industry, those who can provide a wide range of concessions are generally luxury service providers. Because only luxury goods can provide businesses with enough profit margins to make concessions. For example, hot springs, body beauty, hairdressing and so on. However, the biggest worry for businesses is that customers who are attracted by large concessions are not their potential customers. That is, the conversion rate of marketing activities is very low. A further problem is that consumers who buy the Group buy a sense of discrimination from the loyal customers who buy them at full price.

A hot spring in Beijing has seen such a phenomenon. Because the group buys too many customers, the formerly very leisurely hot spring pool is already overcrowded. It directly leads to the continuous loss of users who pay full price tickets or annual tickets.

Second, the discount of group buying in service industry is easy for consumers to create a price illusion. When they try to buy the sweetness of group buying, when they intend to consume products and services beyond group buying, excessive price differences often cause psychological impact on them. Therefore, businesses can make profits through group buying, but often fail to convert group buying customers into loyal customers.

In fact, a couple of years ago, there was a similar phenomenon in coupons. At that time, when consumers went out to eat, merchants often gave consumers some coupons. When you come back next time, you can cash the deduction. Although this way has improved customer stickiness. But the problem is that consumers can not repeat this preferential mode. Because everyone can't eat in a fixed restaurant for a long time. The catering industry itself is a low loyalty industry.

Customers who are holding coupons will find that the price of this restaurant is much higher than that of other types of coupons. In fact, there is no big discount inside and outside. It is totally a kind of price illusion, rather than a direct discount. So the coupons craze began to fade out a few years ago.

The same is true for group buying now. Forty yuan a cup of ice cream is only eight yuan, but if you spend more money, you will have to pay the original price. Such a group buying mode is likely to discourage consumers. Businesses pay in vain, but there is no due reward. The decline of group buying websites is natural.

Third, the price of group buying is very low, but the experience is very poor. Consumers are not familiar with it and have not been transformed into a long-term customer. The buffet group price of five star hotels is only 30% of the original price. However, group buying consumers find themselves not only less expensive than full price customers, but also poor in quality. More importantly, the discriminatory attitude of hotel service staff has made them feel bad, so their negative impression completely concealed the preferential treatment brought by group buying. {page_break}

No matter business or customer, there is a double lose situation.

On the whole, group buying is a better model for large amount of physical consumption. To reduce the cost of circulation, producers can better predict demand and bring positive value to both sides. However, in the field of service, it can only be said to be a new type of "marketing mode". Or from a strategic point of view, it is a result of excessive competition. Businesses, including consumers, did not get any positive gains from it. Whether this model can bring positive effect, I am afraid, it is also necessary for businessmen to make detailed planning and careful consideration.

For the service industry, the Internet can help businesses find the target customers they need most, and niche customers. Group buying can give consumers a preliminary experience, and after group buying, how to further improve the group buying experience of consumers and convert them into loyal customers is the most important problem to be solved.