Blog: 'Group buying' websites and food - an emerging online market
Dean Best | 2 September 2011
'Group buying' has become an Internet phenomenon, with the likes of the Groupon and LivingSocial websites popular destinations for cash-strapped consumers looking for discounts on a range of services. Now, in North America, food-specific sites are being launched.
In just-food's latest Talking tech column, MJ Deschamps reports from Ottawa on Canada-based online grocery business Foodscrooge that, upon its launch in March, became the first company in North America to use group buying to allow consumers to buy high-value food items in bulk at a steep discount. Foodscrooge works with independent retailers to help consumers obtain the products they have purchased through the site.
And, last month, grocery group buying website Aisle50 was launched south of the border in the US. Aisle50 works with supermarket chain Lowe's Food Stores to offer deals through the retailer's loyalty card.
The popularity of group buying deserves the food industry's attention. Some retailers, including Whole Foods Market in the US and Ocado in the UK, are already teaming up with Groupon to offer consumers deals. But what could the impact be on the retailers' margins?
Will other food-specific sites follow in the footsteps of Foodscrooge and Aisle50? Despite the possible impact on margins, could retailers decide to team up with new, food-specific sites - as Lowe's has with Aisle50 - to drive shoppers to their stores?
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