Groupon, the popular online group buying website, made big headlines earlier this month when it reportedly rejected a buyout offer from Google for more than $5 billion (yes, with a “b”). While Groupon may be the best known company in the booming social e-commerce/group buying market, a national company called BuyWithMe that was founded last year by Wellesley’s Andrew Moss has developed a major following of its own (not to mention $22 million in funding from Bain and Matrix) in a market that everyone from AOL to Microsoft is crowding into.
BuyWithMe offers a new local deal each day and users have up to a week to pull the trigger. The website spells out how big a savings the deal gets you and counts down how many days longer the deal will be offered (the merchants get new customers and good advertising). When you sign up for free with BuyWithMe you then get an email a day about whatever the latest deal in your area is — today in the Boston area it’s a romantic couple’s massage in Quincy. You can also get a $10 credit for each person you refer (Click Here! Click Here!).
I recently caught up with Moss, who moved to Wellesley with his family in 2007. He now serves on BuyWithMe’s board, where he provides strategic insight to the company, which has spread to 12 cities nationally and has more to come.
What sparked the idea for BuyWithMe?
The recession and my use of Facebook. I was keen on using social media in some form to bring wholesale pricing to average people. I had previously helped conceive Customink.com, and worked at Giftcertificates.com and that drove some of my thinking. After researching many approaches, I chose this formulation because it was so simple and seemed easy to test.
In a nutshell, what does BuyWithMe do?
We view our core objective as essentially matchmaking on a local level, delivering high quality consumers to high quality merchants. One of the founding principles was rather simple but very hard to execute daily: showcase deals that we actually personally want to buy and share within our own social circles.
Wellesley isn’t exactly known as the bargain capital of the world: How do Wellesley businesses — and local, non-chain ones in particular — fit as potential business customers for BuyWithMe?
Proud to say, we’ve run exceptional Wellesley businesses, including: GrettaCole, Bella Sante, Alta Strada, Upper Crust Pizza, Zoots, Ardan Spa, Id Salon, SkinHeath Centers and others. I believe we’ll be promoting the new Papa Gino’s Pronto, soon, too.
Wellesley has great businesses and we know them well because we live here, so we approached them and they were quite receptive to working with us. BuyWithMe is pretty well known around Wellesley now — we’ve often been passed around on email groups like Wellesley Newcomers Club, Linden Square’s twitter feed and local friends circles. We are also the ‘deal of the day” on Boston.com every day.
Since you ask for people’s zip code when they sign up, I assume you have a sense of activity by people community by community. Can you shed any light on how active Wellesley residents are in using BuyWithMe? Does Wellesley fit the profile of the type of buyer community BuyWithMe is targeting with its vouchers (as opposed to coupon clipping service)?
We have always been very focused on high quality consumers, and staying away from “couponing”. Our offers are exclusive group discounts, where you pre-pay for a voucher. There is no coupon. We ask our consumers to tip on full value of vouchers and we hope they have a great experience and go back at full value, tell friends, etc.
We do know a fair amount, and as we develop the product we will do a much better job of personalizing. Wellesley residents are very active — they are ideal consumers for the businesses we try to work with like good places to dine out, shop, see things, spas, etc. The average buyer has made over 4 purchases (7+ vouchers) at an average price of $44/transaction. Wellesley users skew older: The average age is 40, while the average age of our Boston subs is early-30’s. Wellesley users skew a bit more female: 79% of users are female while overall Boston is 76% female. Wellesley users love restaurants: Food & drink makes up 50% of all purchases for Wellesley residents, while they make up 42% of overall Boston purchases.
There’s a pretty mixed bag out there in terms of how local Wellesley businesses are exploiting social media in general. How important do you think it is for local businesses to get a clue social media-wise? Are you seeing any particularly interesting uses of social media by businesses in Wellesley?
This is hard to answer without risk of a lot of over generalization. But, overall, I don’t think businesses in Wellesley do much with social media, to be honest. The reason is probably simply that running a business is a lot of work, and marketing a local business takes focus and savvy that many owners don’t have time, interest or experience to maximize. The return on social media for a local business is likely low. It is not unique to Wellesley.
That is why BuyWithMe is a compelling partner for these businesses. We give them a platform to get immediate results without any cash paid out. They can focus on their business, not the marketing. While we promote them, they are tweeted, and shared all over Facebook, plus editorialized to over 150,000 high quality, highly engaged and influential consumers locally. That exposure now exceeds what they could get even by paying tens of thousands of dollars for print or radio advertising (with inferior results).
With the number of group buying sites exploding, how do you think things will shake out? Do hyperlocal ones that focus on smaller communities have a chance?
Hyperlocal as a “focus” is not a sustainable model. That is an important element to being more relevant once you achieve scale. Only a few sites can deliver legitimate results that warrant a local business owner’s participation.
Anything else worth noting?
I’d love to encourage anyone to help. Send along ideas or questions. We’re a young, growing company trying to provide a positive experience for all involved and always really happy to hear from people. We’re also hiring, so please let us know of any interested folks for sales and marketing, etc.