Real time deals will herald in a new consumer mantra: don’t buy early

On Media Transparent last October, I explored the idea of real time deals, which requires consumption of a daily deal within a limited time frame. Merchants with perishable products – seats at a restaurant, theaters, hotel rooms, airlines – want a deals system that quickly and efficiently fills excess inventory, especially at a moment’s notice. Both Groupon and Living Social introduced their versions of real time deals this week with Groupon Now and Instant Deals. It’s the next bold iteration of how online deals will transform the way consumers shop.

Restaurants can obviously use these deals to fill their slower Monday through Wednesday dinner slots. I list other types of businesses that would benefit most from real time deals:

High margin real time deals that can be sold nationally or regionally

  • Last minute airline tickets for specific destinations flying from a preferred airport(s)
  • Last minute hotel rooms – redeemable within 24-48 hours. Hopefully every city in a network will have at least one deal.
  • Ski lift tickets. Resorts projecting poor skiing conditions over the weekend can run campaigns to fill their chairs with real time deals throughout the week.
  • Cruises, vacation packages, hotel packages preceding long weekends and vacation periods.

Services and products based on seasonal demand

  • Golf course fees. Nobody golfs in February, even in California. But if the weather is projected to be fair over the next week, half price greens fees will get the duffers out.
  • End of season sports equipment based on season.
  • End of season amusement and water park admission

What are the implications of real time deals?

1) Real time deals encourage last minute buying.

Now, consumers will “game” the real time deal system to extract savings. Wednesdays may replace Friday nights as restaurant night. People will wait to buy tickets to concerts, sports events or theater if they know the program doesn’t have popular appeal, and set up alerts so they’re notified of the opportunities. Groupon (and inevitably other deals systems) uses a simple method to deliver deals by having the user click on the “I’m hungry” or “I’m bored” button to check on real time deals geolocated near where they are. Spontaneous purchasing is exciting; everybody loves the feeling of instant gratification of a bargain and doing something fun at a moment’s notice.

Just as Groupon has instilled the “never pay retail” consumer culture that merchants hate, real time deals will instill a “never buy early” mindset that merchants will hate more. Yet, our society is adapting to real time and I expect the new consumer behavior will embrace late buying because advanced planning is such a hassle with cancellation and substitution (discovering there’s something better to do at the scheduled time) risks. It’s simply much more efficient to, say, confirm your travel plan a day or two before a planned event than to confirm the plan a month ahead only, particularly if pricing is essentially the same.

2) Paradoxically, real time deals can also encourage advance buying for seasonal services.

Tax accountants are far less busy in January than April. Consumers purchasing cars and other large ticket items will often spend weeks or months to make a decision. Christmas trees can be enjoyed longer if offered as a deal during Thanksgiving weekend. Time limited deals can force consumers to stop procrastinating and get things done while pricing is cheap during merchant off times.

About Pat Kitano

Patrick Kitano works with brands in developing hyperlocal engagement solutions and is administrator of the Breaking News Network, a national hyperlocal network devoted to community service. He is the author of The Local Network on Street Fight, and is reachable via Twitter @pkitano and email pkitano@gmail.com.

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