Product Operation: Analyzing the group buying model and advanced gameplay!

The popularity of group buying probably started in 2015, and it gained rapid momentum in 2016, becoming popular all over the country. In 2017, many group-buying products were launched one after another, and Pinduoduo also took advantage of the group-buying gameplay and successfully went public.

An important factor in the popularity of group buying is that it draws on the relationship chain of acquaintances. Social communication among acquaintances is fast, and the cost of trial and error in placing orders is low, so it is developing more and more rapidly.

But now the group buying market is becoming increasingly saturated. In this case, how can we play group buying?

Today we will mainly analyze the product form and gameplay of group buying, group buying product selection, and communication and promotion strategies, and also provide you with a new idea.

1. Several common product forms of group buying

Group buying is also regarded as a social method under social e-commerce. Due to its inherent marketing attributes, it has better solved the problems of product promotion and traffic. The most common way of playing is that the group leader publishes relevant group buying activities in the community, and hundreds of weak-relationship users in the community can freely form groups, resulting in an exponential growth in the number of group participants.

There are several types of group buying: lottery group, trial group, super group, flash sale group, free group, etc.

Next, I will briefly introduce these types of group play.

Raffles & Lottery Groups

These are the two types of gameplay with the largest number of users and the widest coverage in the entire group buying gameplay. Both of these methods usually choose products with high cutoffs, big gimmicks, strong topics and spreadability as group buying items.

The main participation process is as follows:

1. Users participate in group buying and form a group. After N hours, the system will conduct a lottery, and only the users who are drawn can get the group buying products.
2. If the group purchase fails, the refund will be automatically returned. If the group purchase succeeds but the user does not win the prize, the refund will be automatically returned and a compensation coupon will be provided.

The gameplay of the trial group is similar, but the one who wins the lottery is the trial qualification, and you will receive a prize after winning.

The main purpose of this type of gameplay is to attract traffic to the platform, reduce the cost of attracting new customers, and increase DAU and retention rate. But this is also the disadvantage, because some of the people attracted are freeloaders, so the conversion rate is not high, and the conversion rate and consumption contributed to the platform in the later stage are relatively low.

Super Group & Flash Sale Group

A super group is a group-buying model that requires 50-200 people to join. Although its popularity has declined now, due to the large number of participants, it is convenient to operate the tiered prices, so the overall praise is relatively high.

Currently, the products participating in the super group are generally popular products with high cost-effectiveness and strong practicality, with low prices as the number of participants increases. The cheaper the price is. What’s more, the gameplay of the super group is also very simple. You can join the group directly. Once the required number of people is reached, the group will be successfully formed and the goods will be shipped. If the number of people is insufficient, a refund will be made.

The flash sale group is a more exciting way to play, for example, a limited-time flash sale, which starts at 9 o'clock, is limited to 100 sets, and ends when the flash sale starts.

In terms of the group buying effect, these two gameplay methods have the highest repurchase rate. On the one hand, they protect the rights and interests of old users, and on the other hand, they bring in new users. Moreover, through multiple group buying activities, they can maintain user stickiness.

2. Why is the group buying model so popular?

1. Based on acquaintance relationship chain marketing, the activity spreads quickly and has high conversion

For e-commerce, WeChat is undoubtedly the entrance with the most abundant traffic. Group buying has also grown and developed on WeChat. The way to play group buying is to get together with a group of people on WeChat to buy affordable items, thus achieving the dual goals of attracting fans and group buying.

Especially now that various social e-commerce platforms are emerging, some group leaders who have high-quality communities generally have a conversion rate of around 10%. If they have 100 high-quality groups, they can earn tens of thousands of yuan a month. The biggest advantages of group buying are its fast spread speed, high order conversion rate among acquaintances, obvious efficiency in attracting new customers, efficient management of user organizations, and obvious clustering effect.

The gameplay of community group buying is simple and crude, but the shipment volume is very impressive. It is precisely for this reason that the concept of a trillion-dollar trend in community group buying has been built.

1. The route of surrounding cities with rural areas occupies the vast rural consumer psychology

Pinduoduo's route to rise was to surround the cities from the countryside. It first occupied the third- and fourth-tier markets, steadily attracted the attention of hundreds of millions of users in third-tier and lower cities, and then went to first- and second-tier cities to compete with Taobao.

The vast majority of users in the third- and fourth-tier markets lack comparative knowledge of products and do not value the brand value of products. They care more about the price and practicality of products. They buy as soon as they see them, do not have complicated shopping preparations, and place orders quickly. This is also the reason why group buying has been able to develop rapidly in secondary cities.

Moreover, Alibaba has not been able to penetrate deeply into third-tier cities. Although JD.com relies on Tencent's traffic, it has not made good use of WeChat's high penetration rate in third- and fourth-tier cities to play some special tricks. Therefore, group buying has exploded in the context of low e-commerce coverage in third- and fourth-tier cities and below.

1. A win-win gaming system for merchants and users

The group buying model captures the interests of consumers and then spreads it through mainstream social channels to achieve the purpose of attracting traffic and sales. It breaks the traditional e-commerce advertising and marketing method that relies on large amounts of capital investment. Moreover, for some large companies, group buying can effectively solve the problem of heavy inventory pressure.

However, the public's understanding of group buying is mostly limited to online, and there is still little attention and research on it offline. Although large companies such as Alibaba, Suning, and JD.com have begun to innovate group-buying models, they have not yet taken positive and effective actions. However, it is foreseeable that group buying will no longer be limited to e-commerce platforms in the future, and the development of offline group buying will drive another economic boom in the real economy.

3. How to upgrade the group buying game

1. Online group purchase + in-store pick-up

Although online group buying has huge traffic, it is difficult for the traffic to enter the merchant's traffic pool. The "online group buying + in-store pickup" method is adopted, which mainly serves physical merchants. By conducting group buying activities online and relying on social communication and advertising, users are attracted to complete group orders online and pick up the goods at offline physical stores.

Directing online traffic to offline, although merchants only initiate group purchases of one or several products, it can drive sales of other products in the store.

For example, a Hunan restaurant launched an activity through group buying, where a dish of chopped pepper fish head only cost 10 yuan. The store retail price of this dish of chopped pepper fish head was 58 yuan per serving, and the cost was about 20 yuan.

The average per capita consumption in the store is about 60 yuan. Based on this, the boss initiated an activity in which if the consumption amount reaches 200 yuan, a dish priced at 58 yuan will be given for free next time you visit the store. This will attract customers to come back for more shopping.

By giving away fish heads, it seems that the merchant did not make much profit, but on the one hand, this move achieved the purpose of easily attracting customers, and on the other hand, it increased the repurchase rate and significantly increased sales.

From the perspective of physical merchants, group buying can, firstly, solve the problem of attracting customers to stores and promote cross-selling; secondly, it can make full use of fan circles to achieve user conversion.

From the consumer's perspective, Suwei's group buying function can meet consumers' price demands on the one hand, and on the other hand, it can meet the immediacy of consumption.

1. 1 point group buy + lucky draw

This type of gameplay is designed to attract new customers, including group buying for 1 cent or drawing lots. All users can start a group, but only new users can join the group. Old users cannot join the group. That is, if you attract 3-4 new users, old users can enjoy shopping for 1 cent.

Alternatively, there is no restriction on new and old users to start and join groups. After a group is formed, a lottery will be held. The lucky user will receive the product, and the remaining users will be automatically refunded and given coupons.

This method of attracting new users where everyone wins a prize is more popular with users because there are fewer participants and only 1 out of 5 people wins. The 20% chance will significantly increase user participation, and even if you don't win a prize you can still get a shopping coupon. Overall, winning users will get greater benefits, and non-winning users will not feel too disgusted, and coupons can also be used to stimulate user consumption.

1. Double prizes + unlimited group opening

Generally speaking, before the end of a group buying activity, users can initiate group buying activities without restrictions, and merchants only need to bear the cost of one activity product to achieve high user fission. Users have the potential to win prizes without paying any cost, thus greatly increasing user engagement.

Double prizes + unlimited group openings are based on this logic, allowing user fission to double. Because in a lottery group activity, users can only join a group once, but for the group leader, the group leader can open groups without restrictions. In this way, the group leader will spontaneously spread the activity in order to increase the winning rate. The more groups opened, the higher the probability of the group leader winning, and the better the effect of attracting new customers for the merchant.

You can also set up double prizes to increase store conversions. For example, the first prize is a snack gift package worth 159 yuan, and the second prize is 30 store coupons worth 30 yuan with no threshold.

In this way, you can use the first prize to attract users who are interested in the store's products to join the group, thereby achieving accurate customer acquisition; the second prize coupon can be used to stimulate users to consume in the store, thereby increasing the order conversion rate of new courses.

In this way, users only need four simple steps to complete the group buying + sharing actions, which effectively reduces the operating costs of merchants and users and can easily achieve fission. For merchants, as the number of fans of the store continues to increase, sales naturally increase as well.

4. Final words

Regardless of whether it is consumption upgrading or downgrading, for the general public, the pursuit of cost-effectiveness of goods will never stop. People want to get better quality products at lower prices for daily necessities and most retail goods. On this basis, group buying has become a better and faster channel.

For merchants, in addition to being able to expand a large number of real transaction customers in a short period of time, traditional group buying activities require the help of the platform and the payment of expensive advertising fees. Now, merchants can independently conduct group buying activities on the company's WeChat public account without paying additional fees, and no longer need to share profits with traditional group buying platforms.

For consumers, the opportunity to experience super low discounts in group buying is not only a way of life but also the joy of life. This is why users are keen to share and discuss product and merchant information with friends.

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Author: Renrenxiu

Source: Renrenxiu