Walmart Gets Its Groupon but Does Not Let Shoppers Dictate Deals

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Walmart's execs know a money-making scheme when they see one, and they've zeroed in on Groupon's consumer money-saving coupon model as a good thing. So they're launching their own version. Which ... makes them more money. What?

Walmart's Crowdsaver system, available on the retailer's Facebook page, works a lot like Groupon, but in a way that benefits the retail giant much more. Plus, it holds tight reins on the system. Walmart suggests products in the Crowdsaver window, and if enough Facebookers "Like" Walmart's idea, the products in question get discounted. There are a few provisos: Walmart gets to choose the product; enough people have to "Like" it inside a time window Walmart chooses; and Walmart gets to set the discount price.

It all begs the question: If Walmart can afford to sell things at a big discount through Crowdsaver, couldn't it just sell stuff at a lower price anyway? Yes. So here's why they're doing this: Crowdsaver lets Walmart unload surplus product while simultaneously boosting its public image. Imagine these as the goods otherwise sitting in a warehouse somewhere. Or novelties (like personalized Halloween mugs, available on Crowdsaver over the weekend), which likely cost Walmart nearly nothing in the first place. If a Crowdsaver deal takes off with viral-like success, Walmart moves a ton of units for almost no outlay. Walmart also gets insight into how its customers want to shop, and gets lots of "Likes" which it can use as a PR promotional message. Consumers do ultimately benefit from the price reduction, but they're not really driving this vehicle.

And yes, admittedly loss-leader products are a possibility through Crowdsaver, but rest assured Walmart's well aware of that trick already. No matter how much you all "Like" an iPad, you're not getting it from Walmart for $49.95. They did, however, offer a 42" plasma TV for $398, down from $488 after more than 5,000 Crowdsavers "Liked" it.

 

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2 Comments

  • Jay Philips

    This is just another reason not to "like" Walmart. They should just offer the product at a discounted price no matter how many people like the product.

  • justin powell

    This is such an interesting shift as companies begin to assign ROI to Social Media. In this case, Walmart is assigning value to a product promotion (in likes) and then providing a discount strategy. I recently guest-blogged on this topic of Social Commerce and how companies can capitalize. It appears Walmart was listening in or is thinking very like-minded!