Will burger mania change group buying?

Larissa Ham
March 15, 2012
The Age

More big brands may start marketing on group buying sites.

After two days of bargain burger mania, Hungry Jack’s has offloaded 675,000 discount vouchers through daily deal website Scoopon.
In a result that will make dietitians recoil in horror, fast food lovers have snapped up $1.3 million of vouchers in under 48 hours.

It remains to be seen how many of the vouchers – which were free to print, but cost $2 to redeem in store for a Whopper and fries, will be used. But the results could well prove a game-changer for the massive group buying market, which has traditionally attracted smaller businesses, many who struggled to cope with the sudden volume of customers.

Sam Yip, senior research manager at analyst firm Telsyte, said Hungry Jack’s and Scoopon had broken the Australian record for the number of vouchers ‘sold’ in a single deal.

Mr Yip said approximately 1 million vouchers are sold each month through Australian group buying sites, and Scoopon sold almost half that in the first day of the deal.

‘‘This promotion is an example of the changing face of marketing,’’ he said.

‘‘Based on the success of this deal, we can expect to see similar deals emerging in the market this year, where large brands partner with group buying sites to execute great deals on large databases of customers,’’ he said.

Scoopon’s manager of general sales Jon Beros said he expected around 70 to 80 per cent of vouchers would be redeemed. The result had surpassed all expectations.

‘‘From our point of view if we could have got to 400,000 it would have been unbelievable,’’ Mr Beros said.

Simon Smith, a co-founder of website effectivedeals.com, which advises businesses on group buying strategies, said the campaign was a big result for Hungry Jack’s, but they could have done more to capitalise on it.

‘‘Because so many of these deals involve such a big discount upfront, you lose money unless you do get these people back,’’ he said.

‘‘They don’t know who you are, they don’t have your email address.’’

It would be misleading to compare the deal – which was essentially a free voucher until payment was required – with other daily deals, which required payment up front, he said.

Mr Smith said Hungry Jack’s was clever in deciding to ‘‘only give away a burger and fries but not a drink”.

He estimates Scoopon could have picked up around 100,000 new members. Scoopon is yet to tally the figures, and would not reveal the commercial arrangements in place with Hungry Jack’s.

The Australian group buying market, which already has around 80 sites, is continuing to expand at a rate of knots. At the end of last year, the market was worth $498 million, and expected to grow another 30 per cent this year, according to analyst firm Telsyte.

Mr Smith predicts the market will consolidate, as some of the bigger players gobble up the small websites.

‘‘At the same time a lot of the bigger ones will probably be going for a more specialised approach.’’

He also expects there to be more focus on ‘real time’ deals accessed through smartphones.

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