If It’s Not Brokered…

With Groupon seeing continuing commercial pressure and similar ‘holes’ appearing among some of its peers, is online discount culture facing early onset decay? Not at all, insists Clifford Jones; merely a few routine teething problems…

Some years ago – the best part of 20 years ago in fact (eeeek!!) – I wrote an article about this emerging new thing called the Internet, which some people thought might turn out to be a pretty big deal. OK, whatever.

In defining the potential commercial opportunities, I recall saying something along the lines of what makes any net ‘a net’ isn’t the mesh, but the gaps in between. Which is quite true of course. Without the holes a net really isn’t a net at all is it? It’s more of a blanket. Or something.

Anyway… It comes to mind because of the focus of this week’s blog: online discount brokering. Specifically the less than ideal press that’s been plaguing it of late and the naysaying that has inevitably followed – Groupon’s recent downgrading of its predicted revenues; the marketing and PR own goals; the fulfilment issues; the general customer disquiet… you’re familiar with the story, I’m sure.

There was no such thing as online discount brokering (ODB) back when said piece came out of course (there was barely even such a thing as ‘online’). And the Internet has seen massive upheaval and change in the intervening couple of decades.

Central to this – somewhat counter-intuitively – is that the web has tightened even as it has broadened, i.e. while there are probably just as many ‘gaps’, they look to be getting smaller and harder to spot.

The basic rules, however, remain essentially the same.

Businesses, even online businesses, still come into being because someone somewhere sees a gap in a market.

Which of these businesses will thrive, which will survive, and which will die still depends on largely the same things too. How big is the gap? Is it real or merely perceived? And how able is the business to fill it?

Also worth remembering is that every now and then a big fish comes along, tears a chuffing great hole through the ‘net’, and makes room for everyone else. Google anyone? eBay? Amazon?

Enter online discount brokering. And the likes of Groupon.

Does ODB have its issues? Of course. Will there be growing pains? Naturally: it is a new economy within what itself remains a relatively new economy. But suggesting that it is already on the wane? You might as well say there’s no future in selling books online. Or software. Or media. Or sex.

People don’t want cheap stuff because of Groupon. They want cheap stuff, therefore Groupon exists. Firms don’t suddenly want to sell more stuff because of Groupon. They want to sell more stuff; therefore Groupon exists.

Such were the basic dynamics of any market 20 years ago; such will be the basic dynamics of any market in 20 years time.