Category Archives: Shopping

Groupon Re-thinks its Ambitious SMB Platform

Groupon is apparently thinking hard about dismantling its ambitious SMB platform, and refocusing on its core strengths in daily deals, goods and travel. Reports have come out saying that Groupon is offering to sell its Breadcrumb POS platform, which had been rebranded as Gnome; and also sell its interest in Serviz, a Local On Demand Economy home services company that has been developed as ClubLocal by former ReachLocal CEO Zorik Gordon. Groupon has also been in talks to cash in on T-Mon, the South Korean ecommerce service that it bought last year from Living Social for $260 Million, but could now been seen as a cash cow that could allow Groupon to invest in other areas.

According to Bloomberg Business Week, Piper Jaffray analyst Gene Munster thinks that the Breadcrumb part of Gnome could fetch $100 million, and that Groupon’s stake in Serviz could be worth $30 million. T-Mon, which is seen as an ecommerce winner in Asia, could ultimately get as much as $800 million. Groupon’s apparent decision to explore the sale of Gnome is the most interesting to us. A report in Re-Code said that executives casually offered to sell at least a portion of it to Square.

In developing Gnome, which has been built on top of its June 2012 purchase of Breadcrumb, Groupon assessed its widespread, international merchant base and concluded it could reinforce and upsell that base and position itself as a global ecommerce giant. It would do so via a compelling package of highly discounted point of sales devices, payment services merchant analytics and strategically targeted offers to customers.

The investment in Serviz – which gave the greenlight to Gordon’s team to continue developing a service that was not going to go further at ReachLocal – was also seen as strategic as Groupon looked for more and more ways to connect and broaden the local marketplaces. Coincidentallly, it looks like Groupon is giving up on having a piece of the home services market just as Amazon and Google are diving in.

Is Groupon giving up too early? We’ve been impressed with the capabilities of the Gnome platform and the strategic vision behind it. The Serviz product is also impressive, although perhaps too rarified for Groupon, as it aims for higher ticket repairs and services. And separately, T-Mon is going to require enormous investments to grow and maintain its market share in a business that has come to not only include deals but also ecommerce, fashion and services.

The bottom line here, however, is that Groupon may have concluded that its merchant base sees it as a 3rd, 4th or 5th choice for this kind of activity – rather than as a substitute for blue chip and diverse players such as American Express, VeriFone, First Data and Salesforce . While Groupon can always work to keep repositioning itself, it currently seems most secure as a provider of discounted goods and deals that it continues to mold into an always on marketplace.

Analysis: Walmart’s Pull-out from Google’s Local Inventory Ads

Building ecommerce, promotions, search, social and same day delivery services around store inventory is one of those high concept ideas that always make so much sense but have been tough to build around. Key players in the space currently include Google, Retailigence and others. Others, such as eBay, have pulled out or shrunk their efforts.

We’ve been especially interested in Walmart’s decision last week to pull its feeds from Google’s Local Inventory Ads (formerly known as Local Product Listing Ads). Launched in 2013 to complement Google’s e-commerce oriented Shopping ads, the ads allow stores to highlight local inventory and prices, and point shoppers to specific stores. Macy’s, REI and Office Depot are among users of the Google service, but most top retailers are still not participating.

Some of those that do apparently have been holding their noses. To participate with Google, they need to provide comprehensive inventory information. Walmart and others have apparently worried this information could be used against them, showing retailers where they can compete on price against it in different parts of the country.

Perhaps more importantly, retailers are worried that their feeds are infrequently updated and can contain inaccuracies and steer shoppers down the wrong path. Such feeds also may freeze the ability of retailers to engage in variable pricing strategies (i.e. “one hour afternoon specials”). In our view, Walmart’s pull out doesn’t mean that Google and others can’t succeed. But it does mean that it will need to make adjustments to work with dominent retailers that have a lot at stake.

Are there better strategies to collect and leverage inventory at local stores? We’ll be talking inventory strategies with retail expert and former Krillion CEO Sherry Thomas-Zon at BIA/Kelsey NATIONAL in Dallas March 25-27.

New BIA/Kelsey Report Shows Momentum for Card-Linked Offers

BIA/Kelsey is out with my new paper on the status of card-linked offers, which is based on detailed discussions with 14 leaders of the card linking ecosystem, including credit card firms, tech vendors, payment processors, publishers and merchants. Most of the respondents are members of The CardLinx Association.

This week, I presented report highlights to The CardLinx Association’s Mobile Summit in San Mateo. Among the findings: universal agreement that card linking is seeing momentum among merchants; that some budgets for card-linked offers have begun to move from experimental to seven-figure spending; and that many key categories are participating, including Quick Service and Fast Casual restaurants, specialty retail and subscription services.

Challenges remain, however. Once seen in simple terms as a successor to the prepaid model pioneered by Groupon and Living Social, there have been some slow-downs in the business. As Coupons.com SVP Bruce Sattley noted at The CardLinx Summit, “There is not as much fervor among retailers as I would have thought a year ago.”

Clearly, the ultimate success of card-linked offers will be linked to better coordination among the various segments of the CLO ecosystem; the development of a constant stream of attractive offers; greater awareness of CLOs; the elimination of structural sales blockages; and the development of industry standards for card-linked transactions.

More information about the report, including purchase information, may be accessed here.

Uber Tests 10 Minute Delivery Service

The big online retailers such as Amazon, eBay, Groupon and WalMart have been focusing on developing same day delivery channels. Same day delivery is an effort that that may not only boost their edge over other retailers, but also add new anchor channels such as groceries, and also boost impulse sales.

We’ve also seen other players experiment with delivery. The San Diego Union Tribune, for instance, has tested delivery of coffee beans with the morning newspaper. Newspapers have been also a channel for free CPG samples with Sunday newspapers for years.

Now along comes Uber, in the midst of an ocean of bad publicity. It is testing a 10 minute delivery program called Uber Essentials, which is an evolution of an earlier Uber delivery test. The program allows under- utilized drivers to drop off key items from Flu medicine to toothpaste to birth control. The items are roughly the same price as local stores. As with Uber car service, items(and tips) are automatically charged to Uber accounts. One possible hangup: Customers must meet their Uber driver on the street. They also cannot deliver alcohol.

The program is being launched with a free order up to $20, has a tie-in with a free sample of Dunkin Donuts packaged coffee – illustrating a potential advertising opportunity.

Kilponen: SMB Retailers Need to Focus on Foot Traffic Drivers

What should SMB retailers do to level the playing field with larger regional and national retailers? There are no easy answers, but they should really focus on mobile and geo location targeting, says Wanderful Media COO Doug Kilponen. Search has major limitations for them.

“In the old days, you could create free traffic from Google and the like. But SEO is dead for small retailers,” says Kilponen, previously CMO at Merchant Circle. “It’s been taken up by the Amazons and Google of the world. If you do a search term on products, it is a black hole. You can rarely find a way out.”

Mobile, however, represents “new opportunity “ for SMBs — albeit one that is misunderstood. “For small retailers, it is still about foot traffic,” says Kilponen. That means they should tap into location based services; engage local friends via social media; post products in certain categories; and target uses via promotions. Mobile SMB platforms such as Wanderful’s Find&Save Storefront provides “a stronger ROI than what we’ve seen in search,” he adds.

Kilponen is speaking on SMB retail at Leading in Local: SMB Digital Marketing Sept. 22-24 in New Orleans. You can register here.

Wanderful Media Targets SMB Retailers With ‘Find&Save Storefront’

When it comes to search, promotion, customer engagement and just getting found, the challenge for smaller retailers is to level the playing field with larger players (i.e. Macy’s, Kohl’s, Sears). That’s the idea behind Wanderful Media‘s new Find&Save Storefront, an App that allows SMB retailers to promote sales goods, seasonal collections and other items. Several hundred retailers have downloaded the App, which is in soft launch in several test markets. A major launch is planned for October.

The Storefront is an extension of Wanderful Media’s current mission with its Find&Save brand, which currently focuses on large retailer and brand sales “circular” information, which are distributed to about 500 newspaper sites around the U.S. on FindnSave.com and apps for iOS and Android devices.

The new effort marks the second time that Wanderful has tried to serve SMB retailers. Earlier iterations of Find&Save included ads from SMB stores. These were removed from the site’s relaunch in April 2013, however, because they were not really on par, aesthetically, with the larger retailer ads.

The Storefront App, which we found easy to use, enables SMBs to automatically claim locations by their phone number. Once their site and location have been claimed, they can tie geo-sensitive promotional offers or other verbiage to pictures of items they can take with a smart phone. SMB retailers can create as many offers or sales events as they want.

Find&Save Storefront is free to download and use, except for an “Evergreen credit” feature, which enables retailers to promote products beyond the 30 day free period for 99 cents each. Other premium products will also likely be introduced. Features that are being used for Storefront may also be borrowed for other Wanderful apps, such as its sophisticated dashboards for the business and its local peers.

VP of Product Grace Chan told us that Wanderful is poised to serve consumers and three distinct customer groups: “national retailers,” “regional retailers” and local “SMB retailers.” The SMB portion is especially relevant to the company because it has local sales forces set to hit the streets via its local newspaper affiliates.

At the same time, however, Chan notes that SMB needs “may not be exactly the same” as those of regional and national retailers and brands. Local business owners, for instance, pay less attention to brand exposure. They mostly want to drive traffic to the store. They may be less interested in issuing coupons or discounts on a constant basis.

“These merchants like to make ‘offers’ to drive store traffic, not coupons,” said Chan. Or they might simply use the site to introduce a new collection of clothes, or focus on clearance goods. “‘Coupons’ make them think they are leaving money on the table,” she says.

Placing items on the App also takes some planning on the part of SMB retailers. It takes just eight seconds to build an offer, says Chan, but many SMBs aren’t ready to sit down and do that. That’s an area that requires more attention from SMBs, she says.

Wanderful Media COO Doug Kilponen is a featured speaker at BIA/Kelsey’s SMB Digital Marketing conference Sept. 22-24 in New Orleans. You may register here.

A Look at Facebook’s ‘Buy Button’ for SMBs

Facebook hasn’t really been a player in ecommerce –Facebook Credits, its games-oriented initiative, was shut down in 2012 after three years of experimentation with virtual currencies. But it continues to test the waters — which is not surprising, given its volume and huge edge in social media and native advertising.

Last year, Facebook began to allow consumers to add credit card information to profiles in order to enable ecommerce transactions. Now, Facebook says it is testing a “Buy Button” with “some” SMBs.

During the test, consumers are providing Facebook with credit/debit card info for PayPal-like purchases on a one-time-only basis. Neither the SMB or Facebook ever get to see the info – all payments are being handled by a third party processor. Consumers could then opt to allow Facebook to make the credit/debit card info part of their permanent profile, using the cards for convenience.

If Facebook expands the effort – which Reuters reports is currently free for merchants — the implications could be significant. For starters, Facebook’s enhancement of its anonymous consumer profile would put Facebook on a collision with Amazon and its one-click purchase system. By focusing on the under-served SMB market for ecommerce – and likely offering a blend of virtual and physical goods — Facebook would also be breaking new ground.

Facebook’s Joseph Devoy is discussing a wide range of SMB initiatives at Leading in Local: SMB Digital Marketing Sept. 22-24. You can register here.