The micro buying power movement

The internet is quickly unfolding a movement in commerce on the web that we're calling "micro buying power".

Micro buying power is what you get when a highly motivated group of people around a brand or product come together and purchase it for a great discount. Using the web, organizing these sales is easier, and less expensive than ever, enabling just a small number of people (often 500 or less) the kind of buying power previously available only to huge groups or corporations.

The movement, led by sites such as GroupOn, Gilt Groupe, and the growing collection of clones offer a way to both identify with and reward uber fans of your product, while growing their numbers. It's making discounts cool, while not tarnishing the quality image of a product, and it's likely saving many luxury brands from what would be much tougher times during the economic downturn of the last several years.

Luxury brands use these sites to gain new customers. No more do you have to walk into a posh retail store and deal with a sales person who might judge you as unworthy, while trying to protect that brand's elite image. The brand maintains its sense of elite instead by making exclusive offers to "members only", when in reality they might not care who is buying the shoes, the perfume, or the fashion as much as they'd like you to believe. It's the luxury without the stigma, with all the traditional payoffs: you get the item you paid for, amazing quality, the bragging rights, and ultimately you come back again.

On the non-luxury side of things, brands often offer you amazing deals just to get you in the door to try it out. The strategy is similar to the luxury end (high discounts to a small group), but the motivation for the brand or product is to make you a recurring, regular customer.

Take restaurants, for example. Let's say you get an awesome deal on a dinner at a local restaurant down the street. If the food and service are good, you'll much more likely come back a second time you might have been to just pop in and pay full price on a whim.

We think this movement is fascinating. The combination of it being beneficial to both the individual and the brand, with the way it builds loyalty through the use of socialization through group identity achieves a better sense of ownership in everyone than a more traditional marketing message such as, "Are you a person who only wants the best in life?"

If you haven't caught the wave yet, you're missing some amazing deals.