Groupon for Video Surveillance Products?By John Honovich, Published on May 07, 2010
Groupon is the hottest startup in technology today. Its approach has potential in video surveillance.
In less than 1 and a half years, Groupon's valuation is already over $1 Billion. They achieved this through coordinating group sales for products and services. Offering 50% or more off the retail price, if enough people elect to buy, everyone gets a super low price. Groupon makes money from a cut of each sale (read background on Groupon's business model).
See an intro video below from Groupon to understand better:
Companies offering sales win by attracting a large mass of new customers who can become new regulars (something difficult to achieve by normal advertising or promotions). Customers win by getting prices far beyond what they could normally achieve
A similar approach and value could be taken in the video surveillance industry. Imagine an IP camera manufacturer who wanted to expand sales. They could offer 1,000 or 10,000 cube IP cameras for $75 each (limit 20 per customer). Rather than attending shows and getting a handful of leads, they could quickly obtain dozens or hundreds of new customers. Not all would become repeat customers but even if a small percentage did, the return could be high (especially relative to current marketing options).
The middleman who would be perfect for this are the security trade magazines (see a recent article advocating media for this role). They have the mailing list and the motivation to sell products. They could make more money (from direct commisions). Plus the magazines do not have much to lose as almost all are clearly focused on promotions rather than unbiased information anyway.
Internet based group sales look to be a powerful long term force. In a fractured market like video surveillance with so many vendors jockeying for positioning, this could be an attractive option.
[Note: We would never consider this as it's the opposite of our approach as a research organization. We simply find it to be an interesting trend.]