Groupon’s acquisition yesterday of Whrrl gives cause for some speculation into what’s coming in the local social deals space. First and most obviously is that deals are going social. Whrrl was all about capturing individual member interests and tribalizing them in the form of “societies” (self-declared fans of a place). It is not easy to build a social network around commercial endorsement and place loyalties, even if it’s done with the requisite elements of fun, rewards, badges, and so on. Groupon’s move is testimony to the importance of social interaction and activity through which to distribute deals and rewards.
What groupon adds — and if Whrrl is to close then presumably it will be resurrected in new form — is the industry-leading merchant deals system. Whrrl learned and succeeded to a degree in a compelling experience for end users (consumers). Groupon supplies the marketplace and for many businesses, a familiar means to offer discounts.
The power in social commerce aligns with the power of social media in general. It’s not the individual relationship, but social relationships, that drive the engine of distribution. Word of mouth, pass along, group discounts, collective buying — all leverage the natural and everyday connectivity of social media. Conversation and social interaction become conduits and channels for recommendations, offers, shared discounts, and so on.
Getting this right is the tricky part. And whrrl is to be congratulated for having achieved some traction without depending on checkins. It offers points for participation, yes, but the “society” feature was an interesting distinction. Foursquare checkins are a more personal relationship to places (habits and haunts). Gowalla, perhaps a more gamelike and symbolic environment. Whrrl seemed interested in merchant ambassadors and affinity groups.
Facebook will of course have the edge when it comes to using real friendships for deal sharing — but may also encounter the resistance many users will put up to circulating commercial deals in their news feeds. We won’t know where the line is until it’s been crossed (as it was with Beacon. And presumably it has moved.)
If it is the case that we are learning how to provide engaging social experiences that do in fact feature commercial deals, Groupon is likely to focus on its core strengths. As it’s not clear that deals and bargains translate into customer loyalty for merchants, there’s room yet for other approaches. Who will land social recommendations? What of higher-value referrals? And where does this put Yelp? Yelp is huge, but reviews are built on a slow engagement model, by contrast cumbersome when compared to a world of status updates and tweets. It does seem like messaging platforms offer a type of interaction better suited to deal circulation. (I could see Klout playing a role in defining social commercial influencer types for use by advertisers and marketers.)
And what of Google and the search model? Are there social ads and social circles in our future?
Merchants may have a lot of options to choose from in years to come. The systems that are successful will no doubt be those that manage to combine a compelling and dynamic experience to users — as well as a respectful and business-minded campaign management system to businesses, small and large alike.