For anyone looking for proof of Viral activity, 2011 has certainly begun with a wakeup call. The big retailers are feeling the wrath of disgruntled Australians via blogs and chat rooms. While on the positive site the group-buying industry has exploded over the past year with new start ups like Spreets, Cudo, Ouffer, Living Social growing their audiences significantly and mostly virally.
Team A – Spreets a new online aggregator and group buying supplier of coupons confirms the power of positive viral activity by users when provided with great products with seriously discounted prices. Spreets was recently purchased by Yahoo7 for $40million having only been in business a bit over 12 months.
Team A
Team B - A coalition representing 2,000 retailers including Harvey Norman, Myer, David Jones launched a campaign calling for the Government to charge 10% GST on all Internet sales The campaign struggled to find a sympathetic audience. The whole thing backfired and furious consumers took to online chat sites, confirming the power of negative viral activity. New start up like Spreets, Cudo, Ouffer, Living Social, have sprung up in the last 16 months. They all had minimal start-up costs, skeleton staff and are now owned or financed by major corporations. All these companies speedy growth has been as a result of positive viral activity by friends & associates recommending the sites. Spreets has grown their data base to 500,000 and sold 270,000 vouchers last year. Their recent purchase was a massive return for their founders and seed investors.
Team B
Spreets offered group discount coupons as a great way for business to fully occupy their staff, shift inventory and help fill empty restaurants. I spoke with one business that ran an offer in August and sold 30 coupons; they ran the same offer in November and sold 350 coupons. You can see from this fantastic result that as Spreets keeps growing their data base more people were joining, recommending and purchasing coupons.
In the same period a coalition representing 2,000 retailers including the older established business like Harvey Norman, Myer, David Jones launched a campaign calling for the Government to close a loophole which allows overseas businesses to sell goods worth less than $1,000 to Australians free of GST and duty. The ABC actually branded their campaign a disaster. Associate Professor Zumbo says rather than campaign to change the rules, the retail sector needs to find new ways to do business if it is to compete in an ever-changing environment. (abc.net.au)
Furious consumers took to online chat sites, attacking Australia's retailers for what is being seen as a protectionist attempt to close the door to cheap purchases. In one Fairfax pole only 1% of 35,5000 voted in favour of the retailers. The other interesting thing was the number of people in the thousands who actually posted comments. I must admit I was one of those who commented on how hypocritical the retailers were and how out of touch they were. What amazed me more was
The speed of the response in the public arena
How it caught the retailers off guard, they were not expecting the response by so many people, they did not really get the power of the people to respond via the net.
How Gerry Harvey had to admit he made a mistake in agreeing to front the campaign. He now understands the power of the internet and social interaction.
In the “good old days” big business could control the media and what was said. But now with Twitter, Facebook and most online news papers allowing people to comment, it’s impossible to hide anymore.
I do believe the recent events have been a real wake up call to the old established business they finally get it that
People are not going to stop purchasing on the web if 10% GST is added to the price
When retailers do something wrong they will be hammered in the blogs and social networks
They have to evolve and participate in the web more effectively.
Old retailers don’t really offer good bargains even in their sales
The essence of the story, two very different outcomes from very diverse market sectors dramatically affected by Viral activity one in a very positive way and one negatively.
Team A - managed and executed their strategy excellently
Team B - were simply just executed.
It is now inevitable that actions, campaigns taken by companies and people in general have the capacity to go viral so one need to be aware and prepared for all occasions. If a campaign is really popular and goes off the wall, can you cope with demand? If a campaign similar to the retailer’s bombs, how do you curtail the negative feedback? How do you recover?
Niall Power Business Development Tribalise Mob: +61 (0) 417 240 262
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