Creating a Beneficial Purchasing Network in the Digital Village
With the current way communications are evolving through on-line community networks, a smart system of purchasing is growing. Only used by professionals before, wholesale purchasing is now growing under the name of “group-purchasing.” We are moving from an “individual” purchasing system to a community one.
Group buying aims to achieve a new way of consumption in order to secure better prices. The action is based on gathering a certain amount of people to select suppliers and then negotiate the conditions of purchase. This is exactly what distributors: order by volume to get better prices.
This concept appeared on-line in the early 2000’s, but started to be efficient economically in 2010 when the US company Groupon revived it. Groupon offers a wide range of goods and services, local deals every day in many cities across 45 countries. The buyer will buy on-line and spread the word in his network to add people to the order in order to get the best price.
In Europe, more and more start-ups are interested in this business concept. At the corporate level, a Facebook group purchasing application “S-Achat Groupé” has been created by the French company PME 2020. It aims to allowed e-companies to launch and manage business operations on their Facebook page and work with their fans. After the first operation launched, each day will cost €5 ($6.50) excluding VAT.
In France, companies are offering joint on-line purchasing for corporations such as the French startup Erad Social which offers to manage business group-buying operations and flash sales through a Facebook page for €149/month ($194).
On the customer side, e-companies offer many local services and products such as Vis-Ma-Ville. Also, other web sites offer alternatives to “basic” products by offering joint purchasing specialized in organic goods.
Basebio is part of this concept since 2002. Philippe Audard, Basebio’s Founder and Manager: “Our web site offer organic food group purchasing through an eco-responsible and friendly consumption.”
“The concept is a mix between Groupon’s joint purchasing web site, the social network Facebook and the Amap (Community Supported Agriculture)network approach: all this a 100 % organic and fairtrade. The web site develops a service linking artisan producers and consumers,” said Audard.
Audard also said there is a “community dimension” to the concept “with a real social network in the field. Every group has its own space and chat on-line.”
With home delivery service, Basebio’s project is thus convenient, economic, eco-friendly and participatory.
As well as Basebio, the recently launched (June 2011) ethic and organic e-store Bio&Co and its Facebook page. As Quentin Descours, Bio&Co Partnership Manager underlines, this is a good quality/price purchasing system.
“A lot of people would like to buy organic but this still remains relatively expensive,” he said. “Bio&Co and its group-purchasing system that helps them discover products and services suiting their expectations at a more affordable price thanks to enticing discounts. On average, the discounts vary from -25% to -50% which is substantial for the goods offered.”
This system relies on growing identity groups through social networks. Descours explains, “our objective is to gather a community of organic followers which could grow on social networks to exchange ideas, good deals and to have a strong identity web site.”
With this trend, new complementary mobile applications are emerging such as the Ohmydeal.fr group-purchasing comparing iPhone app.
Group buying is also benefitting local shops suffering from the crisis, e-commerce and importations. In addition to local merchants, it also helps e-companies using this system to grow. Overall, for companies, the concept is a marketing asset as most of the communication is made by the buyers themselves.
Thus, through networks which facilitate people’s communication, this way of smart consumption in increasing. It brings negotiation back to the heart of price setting through a changing relationship between sellers and customers. Besides offering their products and services using joint purchasing, companies could earn a certain customers’ guarantee of loyalty and stability.
No doubt this business concept will benefit e-commerce and consumers and lead to more innovative co-buying companies and applications to add to this growing digital village.
This article has initially been posted by Lena Baudo on December 30th, 2011 on Opinno‘s blog (Open Innovation).
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