BrainTrust Query: Gamification of E-Commerce?
Through a special
arrangement, presented here for discussion is an excerpt from a current article
from Insight-Driven Retailing Blog.
Zynga makes money hand-over-fist producing
simple games that are easy to learn and highly addictive (at least for some).
Other companies such as Foursquare challenge people to earn badges and status.
Even the Amazon Gold Box appeals to a certain type of user. Flash sale sites
Gilt, Hautelook (now owned by Nordstrom), and MyHabit (recently launched by
Amazon) attempt to add excitement and fun to shopping in their own ways. Games,
and more specifically friendly competition, can be used to inject fun while
And what could be more fun than an auction? There’s competition
with other bidders, the need for strategy, and a nice payoff if you win the
bid at a discount. An entire industry has grown up around eBay to support this
type of retail business. In both the eBay and flash sale models, the retailer
brings buyers and sellers together for a transaction that benefits all three
But there’s a new group of retailers that have combined auctions and
gaming (some might even say gambling) into a fun way to shop and possibly go
broke. I recently saw a TV commercial for QuiBids that claimed someone
got an iPad for $24.74. Yeah, right. But after investigating, I believe it
could have happened. And while one lucky person got a great deal, many others
wasted a lot of money.
The way these penny auction sites work — others
go by names like BidRivals, Skoreit and BidCactus — is that you must pay for
each bid you make, typically 60 cents. Items start at one cent and each bid
increments by a penny within a preset time limit. Each bid can potentially
extend the time limit, as well. So using the iPad example, 2474 people submitted
bids netting QuiBids $1484.60, which is well over 100 percent markup. The last
guy got an iPad for $24.74 and everyone else wasted their money.
To its credit,
QuiBids now offers “Buy It Now” so that the money
you spend on bids can be put toward the same item at list price. So if you made
25 bids on the iPad, they credit your account $15 toward the purchase of an iPad
at the list price. It’s that very feature that makes QuiBids look like
an e-commerce site with a gaming front end.
Their homepage reminds me of slot
machines in a casino. It’s very enticing … and profitable.
Discussion Questions: How would you rate the growth potential for penny auction websites? What do you think of gaming features mixing with retail selling?