Analysis of the Groupon Concept Store for Brothas and Sistas

Groupon recently opened one of their concept stores in Hong Kong, a highly dense urban area. They started this concept in Singapore last year and now expanding the model. The purpose of the Groupon concept store is to establish a “clicks and bricks” experience combining both online e-commerce with physical retailing interaction such as product pickup. In this article, we are going to look at the concept store as brothas and sistas and evaluate if we can apply concepts to our hoods. In order for African-Americans to progress and develop economic solutions for our hoods, we must look worldwide for patterns and practices and apply proven solutions. In addition, brothas and sistas have to remain globally competitive and forward looking and stay on top of the latest trends and technology using innovation and research techniques. The most compatible region in this world we can apply the most patterns and practice from are high density urban cities in Asia. The Concept Store Launch Groupon launched the Hong Kong store back in November of 2012 and when the news was first announced, it was a lot of skepticism from “American experts” but I knew it was going to be hit because of our research into high-density urban populations in Asia. The reason why I knew it was going to be a hit because the concepts Groupon is featuring are already incorporated in our upcoming point-of-sale software designed for hood retailing. Groupon first launched this concept in Singapore. Keep in mind that it is common practice to launch concepts and prototypes outside of the United States in developed urban areas around the world. 3rd Strategic Institute has launched concepts and testing as well as development efforts worldwide so we brothas and sistas are on top of it also. Global test marketing is something I want to introduce you brothas and sistas to because it is both exciting and fun. In case you didn’t remember, PayPal launch their shopping wall concept in Singapore as well as other technology companies and consumer product companies. But let’s talk about Hong Kong: HONG KONG -- (Marketwire) -- 11/19/12 -- Groupon's (NASDAQ: GRPN) first Concept Store in Hong Kong opened its doors today for the first time enabling customers to experience the Groupon lifestyle in a tangible interactive way. Located in Soundwill Plaza in the heart of Causeway Bay's shopping area, the Groupon Concept Store will offer customers a platform to redeem lifestyle products, test the products in a physical environment and offer an unparalleled customer experience bridging the gap between online and the offline world. To welcome early-bird customers, the first ten to answer mystery questions correctly at the Concept Store will win an iPhone 5 and the first 1,000 redeeming products at the store will receive 50 Groupon credits. As part of its opening celebration, Groupon has scattered flash mob dancers throughout Hong Kong within the past week, ending with a final dance in front of Times Square just before a traditional Green Lion Dance to officially mark the opening of the store. The Groupon Concept Store which has 4,000 square feet of floor space, mirrors every aspect of the website's rich content, giving a physical expression of the brand. More than just a place for picking up lifestyle products that were purchased from the Groupon website, the Store provides customers with iPads to browse, purchase, print and redeem their Groupon vouchers on the spot, creating an ecosystem in itself. It should be noted that flash mobs are frequently used to help promote launches. While some people think it is corny, I think flash mobs is a cool launch attention grabbing technique of a store opening flash mobs in the hood to launch our stores will work. In fact, there is no way in hell I would open a next generation retail store in the hood without doing a flash mob event. Causeway Bay, Hong Kong As Groupon press release stated, the concept store is located in Soundwill Plaza which is 38 Russell Street, Causeway Bay, Hong Kong on Google Maps. This is a high density shopping area and they have an area known as “Times Square” that is a very busy and high density shopping area. If you look at the Soundwill building in Google Maps, you will notice that it is actually a skyscraper: In Asia, skyscrapers are used to host shopping centers, clubs and other establishments so it is not unusual to go up several flights on an escalator or elevator to go to a bar or hang out at a boutique. Here is something I want brothas and sistas to think about here in America – most skyscraper real estate were used only for office space and professional services like doctor or dentist office or jeweler. This is a little off-topic but I would like brothas and sistas to consider bypassing the strip mall and instead creating next generation “clicks and bricks” retailing in downtown skyscrapers and take advantage of the high traffic in downtowns areas across the country as opposed to failure and declining strip malls and suburban anchor mall areas. As you see the Groupon concept store business model, you will see this concept can be built out in major cities across urban America in downtown skyscrapers where you can get rock-bottom lease rates and have a high profile location. Not saying it can’t be done in our hoods, but let’s say you live in a place like Atlanta where hood cats drive around instead of walk about in the hood – it may be better to setup shop in Midtown Atlanta in a skyscraper or near the hotels downtown Peachtree where vacancy is high and rates are negotiable. While Chicago or Newark can probably do this for the hood, if you in Los Angeles, Dallas, Houston or Miami, I want you brothas and sistas to give skyscrapers a look. Concept Store Review The store's design incorporates resplendent colors and a large 'G' logo to mark its location. The store will host more than 15 service personnel at the Groupon Concept Store, which is dedicated to providing more efficient service and shorter waiting times. Customers will find it easier to redeem and pick up their Groupon products purchased on the website, and friendly staff will address any queries that customers may have on-site. As the press release stated, the way the store is setup is people will come in and sit in the waiting area like the DMV for their number to be called and they come up and pick up their Groupon products which can be a printed coupon or tickets or certificate or a physical product. The employees behind the stations appear to use iPads on mounts and you can get these from Wal-Mart online. "We've found many customers prefer picking up their Groupon products opposed to delivery in Hong Kong and as part of our commitment to our customers and the customer experience, the Groupon Concept Store is now launched. The Groupon Concept Shop located in Soundwill Plaza also showcases selected products which will be made available for immediate purchase via the Groupon website on our iPads," said Danny Yeung, Chief Executive Officer and Founder of Groupon Hong Kong. "The store reinforces our commitment to bringing more value and a better experience to customers in Hong Kong." Now many people are thinking it is weird for people to order something on their phone and then want to go pick up the coupon at a site instead of print at home or use a mobile barcode. In the following video below, peep the activity in the Groupon concept store and notice the part about a line outside and limited can be allowed at a given time and you see people waiting for their order: What is interesting is the volume of people coming in to pick up their items and sitting there – this video is proof-positive that people are willing to come pick up their order. But here is the thing – we already designed this aspect in our retailing for the hood software. In our retailing for the hood software, we implemented a “fulfillment zone” area that look like a hotel lobby for paid customers to hang out and wait to pick up their products and this location is separate from the shopping area. So this is good news this concept works. I’m not a big fan anymore of shelving system that requires a person to kneel down or bend over to look at products. This is the one thing I would like to go away. I mean, for children that would be cool for small kids to look at but for grown folks, I hate these below the waistline shelving systems and wish no one use this anymore. I don’t find these below-the-waistline shelving systems safe for hood retailing because a person is distracted looking down and every store robbery video we research, the robber got that knucklehead looking down or bending over to pull out a product and the robber pulls out a gun taking advantage of the sales clerk being in that awkward bend-over/kneel down position. The Take Away From Brothas and Sistas I think brothas and sistas should spend more time studying the Groupon concept store because I think there are a lot of patterns and elements that can be applied to next-generation hood retailing and also scalable on a global level. Let’s get one thing out the way that obvious – you should notice the layout and design of this “clicks and bricks” concept stores are not really expensive compared to a traditional retail outlet but probably capable of delivering more revenue per square foot than a traditional retail store. While the Groupon Hong Kong store is 4,000 square feet which I find crazy considering Hong Kong real estate prices, I think you can scale this concept store down to 1,000 to 1,500 feet. If you look at the Groupon concept store picture above, look at all the wasted open space and keep in mind that Hong Kong real estate can run from $100 to $200 square feet! You can scale this store down using a checker box cube display alongside a wall and use of bar shelve against a wall with stools holding the tablets to shop. In addition, provide QR shopping walls on posters or LCD screens. You can also use less fulfillment stations like 4 at the maximum. Now let’s answer the obvious question – why would someone come to this store and wait for a purchase they purchased online? The answer is simple this is urban culture and urban life, homey. You work all day downtown in a skyscraper and before you go home on the subway, you go to this concept store and decompress and pick up something and hang out with other people. It is a small getaway experience from the hustle and bustle and a diversion and that is the charm of this store – I want you brothas and sistas to understand this and put what I just said in your notebook. Think about it – I’m at work and it’s this cute chick I want to holler at and instead of asking her out to eat, tell her I found a deal on Groupon for an event and if she want to go with me to get the tickets or certificates. We go to this Groupon concept store place, chill out and talk to each other while picking up the tickets at this concept store. That’s the social experience this kind of store offers and why it will succeed so well in urban areas. But here is the most important concept I want you brothas to think about and I didn’t realize when I first wrote this article but the location. I think this concept store can be positioned and should be positioned in downtown businesses around the world and you can start this business here in America or the UK in downtown locations. The reason why is you can capture employees on the weekday and tourists on the weekend and that is a serious influx of traffic all week long. Looking at the hub/spoke diagram above if you had this store in downtown Atlanta for example, you can create the geo-location airport service we spoke of earlier attracting people visiting Hartsfield-Jackson to get offers and coupons and certificates while visiting Atlanta. Then you get the downtown workers and pass out flyers in their offices to come get discounts for local eateries and venues to visit. Then you got people coming into downtown and they stop by your store to pick up stuff and by. And if there is a sporting event or a conference and people are in town at the hotel, they can stop by as visitors to your store. You can scale this strategy to offer coupons and events in a local area in Dallas, then do Seattle, then do Los Angeles, then do Chicago, then do New York then do Atlanta, then do Houston, then do Miami, then do Toronto, then do Mexico, then do London, then do Paris, then do Tokyo, then do Hong Kong, then do Kuala Lumpur, then do Sydney, then do Dubai, then do Bombay, then do Cape Town, then do Johannesburg, then do San Paulo, then do Panama City, then do Lagos, then do Nairobi and then you stop and realized you just took the whole damn world with this hustle! This is the kind of research and intelligence we brothas and sistas need to be doing to build our global empire and I you cats are learning to do this kind of research that the 3rd Strategic Institute does all the time. You can learn about concepts over in Asia, learn to study the area using Google maps for geo-intelligence gathering and research any pictures or videos and take notes on what you see on the business model. You should have figured out that it was stupid to use iPads when they could have got cheaper tablets to run HTML5 interfaces or an Android application. But you should have peep how they use the similiar DMV setup to call people by their number to give them their stuff and put it in a special bag from the videos you saw. As you see, brothas and sistas should take this business model seriously because they see all of the elements we talked about on Dream and Hustle. You see the cheap tablets, hospitable waiting areas for fulfillment, then you see geo-location opportunities to offers and coupons and the ability to setup shops in downtown locations and build a physical presence to separate yourself. Then you put in QR shopping walls and checkerbox cube displays. While Groupon running concepts over in Asia, you can setup this ish right here in America right now as a brotha or sista and beat them in the US market and hit them at home. You can always go to Singapore and Hong Kong later as you build up.

2 thoughts on “Analysis of the Groupon Concept Store for Brothas and Sistas

  1. Good concept to use. I was wondering how can I incorporate the cube shop and geo-location into a store. This is very good info that should be dwelled upon. My cities downtown area needs this concept its dead but it gets busy. Thanks for the heads up Ed, this helps clear up some of the business model.
    There is a lot of local vendors and business merchants whom could use this avenue and downtown. This is going to be a very busy and exciting summer for me and my brothas and sistas thats getting on this. Especially around Casino areas which here they have downtown, business, one or two clubs, baseball field and our old urban mall which is completely dead. I even am going to develop entertainment outside and the flash mob would have never came to mind lol. I can get our youth involved in that way. Thanks again and I’m on it brotha.

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