Group Buying, Daily Deal Trough of Disillusionment

We came across an interesting post a few days ago. We’d like to share it with our audience.

The author states that the Group Buying Space has entered a “Trough of Disillusionment” , referring to Gartner’s Hype cycle.

It is a good read and we see where this can be the case in some geographies, especially Australia where the Author comes from. However, signs do not show this to be the case yet in Canada. The industry is still growing, there is still a large portion of the population that do not know about or even bought deals in this manner and quite frankly until Google, Facebook don’t offer some kind of solution across Canada and until large media companies in Canada take traction with their Deals strategy then the industry will not go as mainstream as it can be. (Facebook Offers will be reviewed on a later post)

Here is the original post:

Group Buying enters the Trough of Disillusionment, will it recover?



Gartner describes the adoption of Technology (where there has been clear market Hype) using the Hype Cycle diagram. The same diagram can be usefully adapted to describe the current challenges facing the Group Buying industry given it was built on a platform of extraordinary hype and has since suffered its own decline. Also, much like how the Technology Hype Cycle describes the organic adoption of the technology over time once the Hype has dissipated and the useful nature of the innovation emerges, Collective Buying does add real value to Merchants and Consumers, and beyond the hype and the noise of Group Buying, that value add still exists – which then begs an interesting question, what is required to ensure an enduring future for Group Buying?

The key phases of the Gartner Hype Cycle are on the left of the table, an equivalent stage in the Group Buying evolution is on the right:


I believe that to get through the Trough of Disillusionment and onto the Slope of Enlightenment, the players in the industry need to follow the 4 tenets of Effective Group Buying:

  1. Provide genuinely useful marketing services for Merchants, including valuable insights on their new customers and mechanisms to drive upsell and loyalty
  2. Minimise the promotion of irrelevant offers through investments in targeting technology
  3. Add Value to their members through genuine discounts on products and services
  4. Underwrite their offers with a suitable customer support policy and helpdesk