Chances are you've heard of Vente-privee. The French company pioneered the booming online private sales market. And you might be familiar with Groupon, a prominent player in the increasingly hot local deal-of-the-day market.
The former sells high-end luxury products. The latter offers recipients of its emails the possibility of being able to buy products and services from local businesses at hefty discounts. What's the secret to their success? You might be inclined to say "It's the deals!" While that's partially correct, the real answer is something far more primal: urgency.
Vente-privee, Groupon and their competitors are examples of online businesses that have found effective ways to bring impulse buying to the web.
In the case of Vente-privee, sales of discounted luxury products are fleeting; members are alerted to upcoming sales and those sales don't last more than a few days. That means that members have to act quickly to snatch up the deals. In the case of Groupon, members receive an email each day with a special offer from a local business. Enough Groupon members have to agree to take part in the offer for it to be realized.
In both cases, members of Vente-privee and Groupon aren't just taking advantage of great deals. There are plenty of places to find those -- from online coupon hubs to cashback sites. What is really driving the success of companies like Ventee-privee and Groupon is that those deals are fleeting. Members have a sense of urgency. They're forced to act quickly because if they don't, they know they'll lose out.
In my opinion, the importance of urgency can't be understated online. The internet by its very nature often encourages consumers to be more cautious and analytical than they are offline. The internet is the perfect medium for research, and thanks to the competitive world of online retail where retailers come up with sales for just about every holiday, consumers who bet that they'll be able to get something cheaper from somewhere else if they hold out a little bit longer are often right.
Companies like Vente-privee and Groupon neutralize some of the factors that make it so hard for online retailers to create the sense of urgency that leads to impulse buying. In effect, they turn the table on consumers. Sure they're offering a good deal, but it's also about the experience. When a consumer takes advantage of a limited time offer, he or she usually comes away thinking positively about the purchase. After all, the offer wasn't going to last forever, and those who weren't in-the-know didn't get to take advantage of it. This is the shopping equivalent of an adrenaline rush, and it's a good ego booster to boot.
Obviously, not every company can adopt a business model like Vente-privee or Groupon, but I think there are a few lessons other businesses can learn from them:
- Urgency is created with well-crafted calls to action. "Buy this Prada handbag within the next two days and you'll save $300!" That's essentially Vente-privee's proposition to its members. It's also a call-to-action with an urgent deadline. Far too often, businesses focus on creating calls to action without giving thought to how a time element can make them much more compelling.
- Email is a great way to deliver those calls to action. It's no surprise that services like Vente-privee and Groupon keep their members informed by email. When it comes to delivering time-sensitive calls to action, email is a great choice, although there's plenty of room for experimentation on Facebook and Twitter too.
- Make a purchase an exciting experience. Even if you're not offering your product or service at 75% off, there are plenty of ways to ensure that a customer walks away feeling like he or she is special. One example: a promotion in which customers who make a purchase within the next six hours receive a random coupon offering a discount of 10-25% off of their next purchase.
While the markets that Vente-privee and Groupon are burning up only have so much room, there's more than enough opportunity to apply some of the secrets of their success to businesses of all kinds.