Bargains Bolstering Community

Good night, Amazon. Hello, locally-focused online shopping.

With the recession still lashing its price-hiked tail at your average bargain-hunting consumer, the possibility of saving 40, 50, even 70 percent on everyday items might seem like a small miracle dropped straight from the sky.

But with a brand new Internet startup that's spreading to cities across America, people everywhere may soon be able to partake in unheard-of savings on everything from restaurant visits to appliances.

The new Internet marketing tool – aptly called Groupon (Group + Coupon, get it?) is geared for online bargain hunters who team up to receive prices slashed to the extreme.

It works like this. A city's users will jump into the Groupon website to scope out the day's bargain. For instance, a hamburger restaurant owner has listed a bargain at Groupon. His offer? Shoppers will pay $10 each and receive a certificate worth $20 in food. In order for the deal to actually activate, a preset number of purchasers must accept the offer. In this hypothetical case, let's say the deal stipulates that 50 shoppers must sign up. If the target number of 50 purchasers is reached, then it's a done deal. If the numbers fail to hit the goal, the deal folds. Onward to the next bargain...

The Washington Times has called Groupon "a movement," and the theme is "collective buying power." From a marketing angle, it's a brilliant scheme. Bargain hunters will call their friends, family, everyone they know who might be interested in such massive savings, resulting in a win-win for everyone. The restaurant owner has suddenly nabbed a fat $500 check in advance food sales, in turn luring in potential return customers while filling what would otherwise be empty tables. On the other hand, all the bargain hunters in the group just snagged the deal of the century: $20 in burgers and fries for half price.

Formerly known as The Point, Groupon makes its money by taking a percentage of each Groupon it sells, with little to no risk for the site owners. And the idea is growing fast; Groupon has just added 17 more cities to its ranks, closing in on the planned 30 participating cities by the end of the year.

Almost one million users are currently signed up for Groupon's daily e-mail alerts, which list each city's daily bargain. As of this writing, to date, 535,611 Groupons have been bought, saving shoppers a total of $24,919,037.

And it's not just food. Groupons have covered everything from massage therapy sessions to concerts, movie tickets, hotels, workshops – you name it. For those of us concerned with profits from online purchases bolstering distant locales, Groupon is just the beginning of a new avenue for shoppers that will help local businesses thrive while keeping local currency in one's own community.

Photo courtesy Jared via Flickr.