Walmart Takes Page from Groupon

Nov 03, 2010

By Tom Ryan

Mimicking the popular daily deal services such as Groupon, Walmart’s
CrowdSaver unlocks a discount once enough consumers opt in. The differences:
CrowdSaver is accessible through its Facebook page, is based more around weekly
deals than daily deals, and does not require purchase after opt-in.

The first
deal, reportedly launched on Oct. 25 on Walmart’s Facebook page, offered 18
percent off a nearly $500 Element 42″ plasma TV with wall mount. According
to Advertising Age, in less than 24 hours, Walmart reached the deal threshold
of 5,000 “likes,” which triggered the discount for all consumers —
even those not opting in with “likes.” Consumers were then advised
to come back later in the week to make the purchase. The offering was available
only online and only while online supplies lasted.

The deal also includes a “Share
this with your friends” option to encourage
others to learn about the deal and CrowdSaver as well as links to other sales
on the website.

CrowdSaver then ran a deal over the weekend — a $6.00 personalized
Halloween photo mug representing a 40 percent discount — that likewise quickly
reached its threshold of 1,500 likes. A deal for the current week — a $69.99
Sony Portable DVD player with headphones at a 36 percent discount — by Tuesday
night had nearly reached its threshold of 5,000.

By comparison, Groupon is not
Facebook-based. Groupon e-mails its deals — typically 50 percent off local
restaurants, retailers, spas, etc. — to its members every day. Consumers get
a short time to agree to purchase the coupon online. If enough members sign
up for the deal, the consumer is charged and receives an email with a link
to view and print a coupon, called a ‘groupon.’ Groupon keeps half the revenue
that consumers pay online, leaving the business establishment with about 25
percent of the value of the Groupon.

“We have high regard for what Groupon’s doing,” Wanda Young, Walmart’s
senior director of digital strategy, told the Chicago Tribune. “Our
idea is to bring savings to everyone. Once it goes live, it will be there and
at that price. It’s not any kind of promotional gimmick; it’s there for anyone
to take advantage.”

She said the idea for CrowdSaver, still in pilot mode,
came from feedback on Walmart’s Facebook page, which celebrates its one-year
anniversary at the end of the month.

“We’ve been hyper-listening to this page, and doing surveys, as well,” Ms.
Young said. “It’s kind of core to Walmart. It goes back to the days when
Sam Walton was going up to customers in the stores saying, ‘What do you like?'”

Discussion Questions: What do you think of Walmart’s CrowdSaver service? How
do you think it compares to Groupon and other similar deal services?

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13 Comments on "Walmart Takes Page from Groupon"

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Max Goldberg
11 years 6 months ago

Walmart has come up with a nice promotional gimmick that supports its brand theme of lower prices. It will drive some sales, but most importantly will build WM’s presence in social media by requiring participants to visit its Facebook page. Very creative.

David Biernbaum
11 years 6 months ago

Walmart is doing a smart thing by mimicking the popular Groupon deals. The massive and diverse Walmart consumer base will catch on and pay attention.

Anne Howe
11 years 6 months ago

Walmart is going back to the days of Sam Walton and listening carefully to shoppers. How can that be bad? I like that they keep listening and trying new ways to put relevant offers in front of shoppers. I’m sure they could use this strategy to pick up slower categories such as home decor and fashion. I hope it doesn’t result in just more discounts on classic CPG products consumers buy anyway. I’d recommend they keep it more interesting than that.

Marge Laney
11 years 6 months ago

CrowdSaver is the 21st century ‘blue light special.’ Walmart is the perfect retailer for this type of promotion as they’re known for their aggressive discounting and their customers expect it. It’s not only a terrific example of social media marketing, it’s a great way to get people back in their stores.

Ben Sprecher
Ben Sprecher
11 years 6 months ago

What a brilliant move by Walmart! They get customers to publicize deals on Facebook without having to hand over extra margin to a third party. And because shoppers have to come into the store to buy the promoted item, Walmart might increase shopper trips to boot.

If only they could tie shopper purchase histories to Facebook fan profiles… then they could see what percentage of ‘likers’ became buyers, and whether the purchases tended to be incremental or cannibalistic. I’d love to see those stats.

Paul R. Schottmiller
Paul R. Schottmiller
11 years 6 months ago

Might be a little early to “grade” but what is not to like about a $500 plasma TV? Walmart buys for less and sells for less and this is consistent with delivering on that value proposition. One intriguing element is that using the social media channel may allow them to expand their on-line customer base by reaching new segments that don’t regularly shop Walmart/ It is going to be interesting to see what other deals they come up with and the impact on different customer segment.

Doug Fleener
11 years 6 months ago

I love Marge’s comment that it’s the new blue light special. I think it’s a brilliant strategy for Walmart. It rides the Groupon wave, it reinforces low prices, but most important it will drive people to like them on Facebook. (Can we go back to Fan rather than Like?) Hats off to Walmart. At the same time retailers who aren’t competing on price should not be tempted to copy this approach.

John Boccuzzi, Jr.
John Boccuzzi, Jr.
11 years 6 months ago

I hate to say it but great idea, Walmart. Target, Sears/Kmart, Costco, CVS, Staples, Toys R Us and others should all be thinking about their version of CrowdSaver ASAP. The key to Groupon’s and CrowdSaver’s success is they are actually offering significant savings to shoppers. Retailers should not go into this thinking a fractional savings will work.

Steve Montgomery
11 years 6 months ago

Great idea. Doing this on a weekly basis gives people a chance to react and to let others know about the deal. I agree with many of the comments about driving not only sales but also social media awareness of its Facebook page. It will be interesting to see which items Walmart elects to feature on CrowdSaver.

Ed Rosenbaum
11 years 6 months ago

Walmart has found yet another way to drive traffic. Obviously, this is not so much about the offers as it is about filling the carts. This is also a method of upgrading the typical Walmart shopper’s model and raise the average spend per customer. You have to hand it to them. This shows why they are the leaders in their field.

Doug Stephens
Doug Stephens
11 years 6 months ago

A friend of mine, @georgeleff, made a good point on this story. In most cases in the social space the more “likes” you get the more equity it suggests your brand might have. In the case of the Walmart deal of the day program, consumers are being encouraged to “like” something only to drive the price down.

Camille P. Schuster, Ph.D.
11 years 6 months ago

Sounds like a good idea. It will not appeal to all consumers but nothing is going to appeal to all consumers. This is a great option for consumers interested in participating.

Brian Kelly
11 years 6 months ago

Retailers are challenged by the increasingly diminished distribution of newspapers which remain the primary medium in their MARCOM mix. Coupons are now recognized as the “customer centric” choice of retail promotion as they chose their deal and act.

In a distribution and content world, retailers pursue new distribution methodologies for old school content. For new consumers (millenials) and new tech apps (Facebook) what was old is now new. So WMT, the EDLP champion, is following the mob to couponing. How ironic.

Or as we like to say, “retail ain’t for sissies.”


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