Green Groupons -- Will They Work?

If you haven't heard of the new phenomenon known as "Group Deals" (brought to you now by many sites, most notably Groupon.com), here's the quick take: if a pre-determined number of people sign up for an offer from a local merchant, then the deal becomes available to everyone who signed up. Groupon gets a cut of the deal. If the minimum number of folks don't sign up, then no one gets the deal. Typically, shoppers have just one day to sign up for these deep discounts. Groupon has expanded to cities throughout the U.S. and numerous knock-off sites have popped up to try to get in on the group deal craze.

Credit: U-M SNRE

The concept sounds like a winner, right? One that should work equally as well for green shoppers hungry for a deal on sustainable products and services?

Several small companies have launched recently to test that theory. Will they succeed? Only time will tell, but, based on Ecobunga!'s experience with green consumers, there may be a few challenges ahead for anyone starting a Green Groupon.

1) Group deal sites depend on the sheer joy of consumerism. It's fun to get a great deal, even if it's not for something you really need (let alone want, sometimes!)

However, green shoppers tend to be anti-consumerist, to one degree or another. They have embraced (or at least begun to embrace) the "Reduce, Reuse, Recycle" mantra, and getting them to jump on a deal for something they don't consider a necessity, even if it comes from a green merchant, is antithetical to their mindsets.

2) Group deal sites rely on serious volume. In order to sell the group deal concept to a business, you have to ensure that a) the discount can be sold in large enough quantities to make up for the loss on the individual sale and b) there are enough eyeballs viewing the deal to make it an attractive sales promotion tool.

If you don't have volume, merchants won't bite. And even though, among certain circles and in certain locales, it may feel like "everyone we know" is green, it's not clear whether you can drive enough traffic to your Green Group Deal site to generate enough sales to make the concept an attractive proposition for merchants. And no merchants means no revenue for you. The green population may be slowly growing, but it may not be large enough right now for a concept in which getting boatloads of web traffic is at the heart of its success.

Groupon has hundreds of millions of dollars in investor money, enabling it to blanket the web with ads, attracting consumers in droves. And yes, the viral nature of the product clearly helps (since you won't get the deal unless the minimum is met, you're that much more likely to share a deal you've just signed-up for with friends.) However, unless every person who signs up for a green deal has only green friends (and lots of them), then the viral nature of a green group deals site is inherently limited.

Unless these new Green Groupon sites have accounted for how they plan to get hordes of green shoppers to their sites cost-effectively and how to counter their anti-consumerist tendencies, then we remain guarded about the notion of daily green group deals sites as a for-profit venture.