Category Archives: Shopping

Is Groupon ‘Misunderstood’? It Probably is Under-Appreciated

Newly Elevated Groupon CEO Rich WIlliams

Groupon is “misunderstood”; people haven’t updated their view of Groupon as a full blown marketplace rather than a “daily deals” company; and it actually is “the unquestionable leader in local.” All this per newly-elevated CEO Rich Williams, in a public letter.

“We have unprecedented experience in local, and what we believe is the right vision and strategy to make our goal of becoming the daily habit in local a reality,” says Williams, who has held executive ranks with Groupon for four years. While the company is going through many changes, “there are some very important things that are staying 100% the same: our mission to connect local commerce; and our vision to build the daily habit for local commerce, the marketplace where people discover and save on amazing things to eat, see, do and buy in their neighborhood. “

In his letter, which was sent to the press/analyst community, Williams concedes past strategic errors; and promises to move away from a reliance on the high volume,“empty calories” of low margin electronics sales. He also promises new marketing efforts and shopping features that will attract “millions” of new customers. And while Groupon has closed down a number of international programs – this week closing down the Scandinavian countries — it will redouble its efforts on several of the remaining international markets, including Australia, France, Germany, Italy and the UK.

Williams candidly acknowledges that the company has brought a lot of its troubles onto itself. It has highlighted — and then de-emphasized — one strategic initiative after another. I’d like to hear more about the status of several initiatives, including offer personalization; the food delivery effort; the Breadcrumb loyalty and POS program; self serve deals; and the extended publisher network.

Groupon also has moved away from offering exciting and creative deals. Now, its inventory includes a number of predictable and/or shoddy goods. While the company claims to personalize deals for users, I haven’t seen it. (Not to be prudish, but I recently got an email promo with a lot of sex toys in it.) Moreover, some of the pre- discount values on the site are exaggerated.

So — write off Groupon? Definitely not. At the end of the day, we’re still looking at a very large, mobile-oriented marketplace with more than 500,000 items from one million merchants being marketed to nearly 50 million consumers members. That volume speaks for itself. And it is a unique offering, if not yet a blue chip one. Based on Williams’ note, they’ll keep working to get there.

Here are six highlights from Williams’ letter:

1) “Groupon is a misunderstood company. We’re misunderstood by analysts. We’re misunderstood by media. We’re misunderstood by consumers — both those who haven’t visited our site in awhile and those who’ve never purchased from us.”

2) “Too many people still think of Groupon as ‘that daily deal email company.’ The reality here is twofold: first, we’re a marketplace — and a big one — one with more than half a million deals in three different categories. Sure, email is still important, but more of our purchases come from on-site search than email, and more than half our purchases occur on mobile.”

3) “There’s more to our marketplace than deals, including an increasing number of market rate and low discount offers, and new ways to save time as well as money. They’re just in their early stages and we want to move faster.”

4) “MYTH: Groupon isn’t growing/Groupon is going out of business. We’ve definitely grown: since going public, we’ve grown billings and revenue by over 90%; we’ve had seven consecutive quarters of double-digit billings growth in North America; we’ve doubled our customers over the past five years; we’ve increased the number of deals on our platform by 500x since we went public in 2011.”

5) “MYTH: Groupon is bad for businesses. The vast majority of our deals (82% as of the last report) are breakeven or better on the deal itself (i.e., no overspend or cross-sell required). That is simply unheard of in high volume small business advertising and customer acquisition.”

6) “MYTH: No one can win in Local — There are a number of big companies — Amazon, Facebook, Google — who’ve tried and died in local….(but) We have sold nearly a billion Groupons life to date. Add to that our nearly 50 million active consumer and 1 million merchant customers to date and you have a lot of proof of the possibilities in local.”

Sneak Peek at BIA/Kelsey NEXT Show: 6 Things I’m Watching For

“End of Big” Author Nicco Mele Keynotes BIA/Kelsey NEXT Dec. 9-10

BIA/Kelsey’s December event has been local’s flagship, and always ahead of the curve in all of local’s iterations. It has been widely imitated, but never totally duplicated! I‘ve been producing it for a long time, but this year, handed it off in midstream. I’ll be moderating some great sessions, though, and the conference team has ended up with 52 hand-picked speakers, a Tech Expo and two full days of programming. Here are some of the things I’m most excited about:

1. The New Cut on Local and Community. Local’s still at the concept stage in a lot of areas. Why think small? Two leaders from USC’s groundbreaking Annenberg School (my alma mater) will point to the new directions in separate keynotes. First up is Nicco Mele, the author of The End of Big (2013), a tour de Force on “radical connectivity.” He’s also fresh from his stint as deputy publisher at The LA Times, where his team’s efforts to seize new initiatives in local had already produced major new revenue streams. He’ll have a lot to say about what’s going to work. Leading off Day 2 is Dr. Karen North, Director of Online Communities, a dynamic presenter who is focused on Millenial applications and behavior – you’ve heard, perhaps, these kids live on the phone?

2. Keynotes from Google and Facebook: The latest in local from the two dominators and trend setters in local. Danny Bernstein at Google is set to highlight its deep linking efforts (Google Now). He is sharing the stage with Button’s Chris Maddern and Local Seo Guide’s Andrew Shotland.

3. Big Thinking about MarTech: Big Data’s impact on local cuts many ways – analytics, leads, targeting, planning, But it’s only a subsegment of the broader “MarTech” movement. Those in the know attend Scott Brinker’s annual MarTech conference in Boston. Scott, who also runs ionactive, is going to focus on local and highlight what’s important and why for us at NEXT. He’ll be joined on stage by Surefire Social’s Chris Marentis.

4. The Mobile App-Driven Marketplace. The mantra is that it isn’t really about search right now, because Mobile apps are driving the marketplace. What’s that really mean for local? One of the best analysts I know is Mark Plakias, who has been running Orange’s think tank in Silicon Valley for several years. He’ll be joined by’s Paul Ryan and DialogTech’s Steve Griffith. This will be quite a session.

5. Local and The Internet of Things. We’ve been pondering iOT’s impact on local — when everything is linked, from transit cards to vending machines. So has the new venture, Instersection, which is a partnership from Google Ventures and former Bloomberg head and NYC Deputy Mayor Dan Doctoroff. CSO Dave Etherington will provide insights on what they are up to. He’ll be joined on stage by Cisco’s Andy Noronha.

6. Close Up on The New Local Marketplaces. We’ve been saying for a long time that local marketing has gone beyond advertising. Now it’s “closing the loop” with transaction data, offer targeting and complete behavioral profiles reshaping the game. Groupon’s Dan Roarty, Microsoft’s Neal Bernstein and MOGL’s Jon Carder share their insights. Cardlinx CEO Silvio Tavares will add data and help me run this session.

Haven’t got your ticket yet? I have a *little* influence and can get you $400 off. Please use this discount code: LOCALONLINER. You may register here.

Booze As a Digital, ‘Shop Local’ Story: Craft Spirits Exchange

A key part of the Shop Local movement in recent years has been sparked by the rise of Craft Beer, with many city and states dropping nuicense regulations inhibiting breweries from providing samples, selling food or selling take away bottles smaller than 22 ounces. At this point, the contribution of breweries, wine makers and craft spirts to local economies has been felt in hundreds of markets.

The role of digital media in promoting and selling local beer, wine and spirits has been a significant one, with social media rating products and creating buzz for products and events; directories pointing consumers in the right direction; and now, on demand services like delivering booze directly to your door (a fad, ok?)

One entrepreneur I’ve watched carefully over the years is Steve Gilberg, who created the Happy Hours website and then Facebook directory of bars and drinks, which partially inspired my creation of the Marketplaces research program for BIA/Kelsey; and then also created Wine Twits, a national happening of promoted wine with hundreds of local parties tweeting away.

Gilberg’s newest project is Craft Spirits Exchange, a website and app dedicated to promoting local craft spirits to craft enthusiasts around the U.S. He’s CMO for the Exchange, reporting to Luis Troccoli, a native New Yorker who was inspired to launch the exchange in 2013 when he moved to Florida and couldn’t get access or even news about his favorite spirits.

The Exchange is a spirits marketplace that combines bright editorial; more than 1,100 profiles of spirits products; community reviews; and marketing from local craft retailers. More than 40 states now allow direct shipping of spirits, acting as major contributors to local commerce. My own state, Oregon, has more than 60 spirits producers. Troccoli says a major role for the exchange has been to enable east coast consumers to buy west coast spirits, and vice versa.

Money2020: Payments and The Internet of Things


The Internet of Things is all about connectivity; it is especially conducive to the world of payments. Branching out from prepaid information on transit cards (i.e. London’s Oyster Card), financial entities have sought to add efficiency, security, reliability and safety to micropayments via Internet of Things tech.

At Money2020 in Las Vegas this week, the demos were alive with iOT. MasterCard and Visa, especially, showcased a wide range of truly useful applications.

Over at MasterCard, contactless card gas pumps, vending machines and coinless washer/dryer machines were highlighted. Regarding the latter, a member of MasterCard’s St. Louis based labs unit noted they had done their homework, interviewing multi-unit apartment owners, who have found it a costly burden to collect coins from machines, prevent coin box break-ins and know when they were needing repair.

Gas pumps, meanwhile – a mainstay of Digital Out of Home applications – were not only seen as logical candidates for contactless payments, but also to manage loyalty points and print out targeted offers to mobile phones. (yes, DooH is made old hat by iOT.) Excentus’ Fuel Rewards – a loyalty program — is a likely beneficiary of such efforts. In 36 months, Fuel Rewards has attracted six million members, who made 22 million transactions.

Visa’s demo highlighted contactless cars, vending machines and coffee stands. Key to the latter: payments were made by contactlessly waving a hand under a scanner. The unique hand data (finger prints etc.) is suggested as a superior alternative to thumb ID. It isn’t seamless, yet. My large hands required several do-overs to get them properly filed. Eye scanners from Eye Verify that measure the whites of your eyes and retinas were also highlighted at the show.


Pinterest: Buyable Pins and the Evolution of Social Commerce

Pinterest has great goals for its new Buyable Pins program, which it believes will make social commerce relevant again, and mobile shopping usable. During a keynote at Cardlinx’s “Data Driven Commerce” event Sept. 22 in Bellevue, WA, Pinterest’s Head of Commerce Business Development Tiffany Black said the two month old program enables mobile and social commerce for a new generation for which social commerce has died, and mobile shopping is “terrible.

“There’s nothing ‘Group’ about Groupon anymore,” Black quipped, referring to its current identification as a marketplace. She also argues that social gamification sites such as Sneakpeek are also done (although we would argue that other social game sites such as MOGL and Lucky Diem have plenty of life left in them).

In any case, Pinterest shouldn’t be lumped in the same categories, says Black. It is a “forward looking,” “visual discovery platform,” “where people are thinking about tonight, tomorrow and next month. “Pinners are planning for their future,” she said.

They are also highly oriented towards mobile. Eighty percent of Pinterest’s 100 million monthly users come in via mobile devices.

While there have been complaints about the Pins turning Pinterest into a schlocky shopping mall, Black says it is only as commercial as its users want it to be, since it is entirely personalized. Top pins are food and drink, fashion, home improvement, health and fitness, cats and travel, she notes.

There’s also no problem with the merchants, which receive buyer information to confirm every purchase, with Pinterest merely acting as a common carrier. Currently, Pinterest is enabling purchases for 5,000 merchants and two million products.

BoA Sees Card Linked Offer Program Deepening Customer, Merchant Relationships

Bank AmeriDeals was launched in 2012 with the most ambitious marketing effort in the card linked offer space. Since then, the promotions program has given BoA insight into spending for over 35 million accounts, and helped deepen customer and merchant relationships, says BoA’s Alfred Hamilton, SVP of Bank AmeriDeals, during remarks on Sept. 22 at Cardlinx’s “Data Driven Commerce” event in Bellevue, WA.

Noting that customer attrition has gone down among Bank AmeriDeals users, Hamilton says that customers have gone from being leery of having their spending habits scrutinized in order to target them with better offers to actually wanting more specific targeting. “We’ve come a long way from ‘this is creepy,’ he says. “Customers expect offers to be very, very targeted.”

Bank AmeriDeals continues to make the safeguarding of consumer data a top priority, however. “No customer data leaves the bank,” Hamilton emphasizes. “We don’t have insight into all your wallets, just your BoA wallet.” That insight has proved critical for showing businesses how much incremental business AmeriDeals is providing them. As “retailers are getting more astute in this space, they need to know that this is incremental business we are getting for them,” says Hamilton.

Separately, Hamilton notes that Bank AmeriDeals is riding the wave from desktop towards mobile payments. With 18 million Bank of America customers now using mobile banking services, desktop-oriented online banking has become increasingly “kind of passe,” he says.

Hamilton’s insights into the positive impact of card linked offers were seconded at the event by Cardlytics U.S. Operations President John Brown. Cardlytics is the vendor providing the platform for Bank AmeriDeals, among other bank efforts.

Speaking generally, Brown said that card linking has multiple benefits for financial institutions beyond direct revenue – al leading to more engagement and less attrition. He notes that users do more online and mobile banking after activation, increasing their monthly sessions from 7.9 times a month to 9.1. times a month. They also increase their total monthly spend after their first redemptions by 5-7 percent;. It also helps boost a financial institutions’ CRM program because the interest in seeing offers plays a role in boosting email open rates by 2x, and click through rates by 10x.

Brown also says that the roster of companies providing card linked offers is getting increasingly stronger. While many brands are watching early results before they sign on, brands such as McDonald’s and Nordstrom Rack are participating and attracting redemptions from well heeled consumers. “Upscale people eat at McDonald’s as much as anyone else,” he says.

Microsoft Earn: CLO Effort Aligns ‘Time, Location, Context, Commerce’

Microsoft continues to push ahead with its card linked offer program, which has been in Beta in Washington, Arizona and Massachusetts since May. But since we last wrote about it in April, the program has been rebranded from Bing Offers to Microsoft Earn. The program is now more oriented towards promotional redemptions at The Microsoft Store. Registrants can earn points at participating merchants towards Microsoft products.

Participants in Microsoft Earn include hundreds of local restaurants, as well as national brands with local outlets. THey include 7-Eleven, Starbucks, Papa John, Whole Foods, Shell and Pet Smart. 1-800-Flowers is also participating.

Speaking at Cardlinx’s “Data Driven Commerce” meeting in Bellevue, WA, GM of Holistic Monetization Erik Jorgensen says “merchant acceptance is shifting from skeptical to believers.” CLO represents “a great signal for measuring the impact of the digital world to the real world.” It provides “friction free, almost magical consumer experiences.”

Early results have been promising with “member acquisitions easier and engagement great than anticipated,” said Jorgensen. “Meanwhile, customer confusion and support (issues) have been less than anticipated.”

Microsoft Director of Payments Will White said that CLO is an anchor product for a new generation of commerce built around wallets and authentication (“vitally important”), ease of use and personalization. CLOs “align time, location, context and commerce,” he said. The idea is to use signals to offer the right things at the right time.