Tag Archives: American Express

Next Steps For Groupon As Andrew Mason Departs

It was just a matter of “when,” but Groupon has finally relieved Andrew Mason of his CEO duties after a quarter in which Groupon widely missed its mark because of its very high expenses and serious international issues, despite growing 30 percent year over year. Vice Chair Ted Leonsis and Executive Chair Eric Lefkofsky will run the company until they find a new CEO for Groupon or perhaps, even sell it.

Groupon, of course, has been written off in some circles as a big fad that ultimately dis-served its SMB merchants– something we have never totally accepted. But the ongoing possibilities for Groupon are wide ranging.

The company isn’t currently sustainable, with its heavy sales-laden staffing (whoever said local is scaleable?) But just as #2 Living Social’s investors saw that it was more prudent to inject $110 million to keep it going for its next stage, Groupon, which is at least three times larger, is better off staying juiced for now.

It has massive merchant and consumer email lists, and a wide selection of B2B, scheduling, processing, mobile and loyalty technologies – plus a growing travel business, as well as a lower margin, Groupon Goods business. If its investors wanted to stay the course, it could certainly continue its march into Amazon-like ecommerce territory.

The elevation of Leonsis and Lefkofsky to acting co-chiefs has a lot of possibilities in itself. How about a couple of interesting, not-so-crazy scenarios? One is that Lekofsky could finally merge Groupon with his newer investment in Belly, the Groupon-like, Chicago-based loyalty play that has just celebrated its one millionth member.

More enticingly, in terms of scale, Leonsis could influence an acquisition of Groupon by American Express, which he serves as a board member. Amex has just opened up an ecommerce store as part of Amex Sync and needs to feed it.

Or Groupon could be sold to Amazon, which is investing heavily in the local deals space; or it could even be sold to Google, which had once offered $5 Billion for it. Perhaps Marissa Mayer at Yahoo will make a run for it. She was a major instigator of the Groupon negotiations as a Google exec.

As for Mason, he may not have been the ideal CEO of the relatively soul-less, deals department store that is currently Groupon. But he’s funny, and authentic, and has been a great spokesman for the “What do we do this weekend that is wild and offbeat” lifestyle that catapulted Groupon –and the deals space — into local’s biggest phenomenon ever.

Sometimes, Mason, reminds us, business isn’t merely about business. It’s about helping people live their lives. This is especially true at the local level in which Groupon has been a shining star.

Andrew Mason after his groundbreaking BIA/Kelsey Marketplaces keynote in March 2008

First Person: Buying From Amex’s Twitter Store

I had the fun of buying Amex’s $25 gift card for $15 the other day on Amex Sync, the new Amex Twitter Store. All I had to do was sync my Amex account to Amex’s Twitter Store page, joining the ranks of 621,000 + other people, and I was all set. The card was delivered via UPS three days later.

The program is similar to other “sync” programs that Amex has been running on Facebook (”Like, Link. Love”), FourSquare and Xbox. In fact, it replaces “Like, Link, Love.” And the offers will keep coming. Sixteen merchants have been initially signed up. Today’s offer on Twitter was a Kindle HD Fire deal for $149, or $50 less than you’d pay on Amazon. The offers are a mix of credit for purchases and at home deliveries. Another offer was $25 off $150 spent at Eastern Mountain Sports.

On Twitter, there was a little learning curve involved. While there is a very clear video on YouTube, now seen 1.2 Million times, there isn’t room for a lot of instructions on Twitter itself. When I didn’t get a confirm for a half an hour or so, I assumed it wasn’t going through., and tried to retweet it (like a lot of people).

But in the end, it was there; it was a fun, social experience shared with a lot of people; and it was definitely a new way of buying things. In fact, it was the most fun I’ve had on Twitter since WineTwits annual virtual tasting.

Is it a winning model for Amex? On its face, the economics of it are hard to figure (as it is with Small Business Saturday, which gives you $25 off any purchase made at an SMB).

Amex won’t say how many gift cards they made available, but they did sell out within a few hours. If they sold 200,000, that was $2 million (plus shipping). 500,000 would have cost it $5 Million. If we keep buying items through the Twitter store, though, that’s a low customer acquisition cost.

Amex also gets a viral effect going from everyone tweeting the deal. There is also a certain gamification element of waiting for the confirm and then doing it within the 15 minute time frame.
Is it a winning model for Twitter? Most probably. It is likely to be getting a commission on sales – its first non-advertising revenue.

Is it a winning model for merchants? Potentially, it could be huge.

Amex’s Joanna Lambert: Build Around Consumers ‘In the Wild’

American Express is seeking to move beyond its narrow image as a blue chip premium credit card company, and open the doors to new business opportunities, customers and revenues. Its ticket? The group of emerging payment products and services –deals, loyalty, prepaid cards, ewallets and mobile.

At OMMA Mobile MCommerce in Los Angeles Oct. 22, SVP of Strategy and Business Innovation Joanna Lambert noted that in the wake of the 2008-2009 recession, CEO Kenneth Chennault set up a distinct business unit “to challenge the status quo.”

Since then, Amex has developed loyalty deals with Facebook, Twitter and FourSquare; a joint venture with Zynga to provide virtual game points to credit card holders; created Small Business Saturday to promote Christmas shopping; and launched Serve, a prepaid account service in a bid to reach an entirely new customer base, including young adults and women. Last week’s launch of Bluebird with WalMart is part of that effort. Amex has also set up a major mobile JV in China.

Amex’s goal is to provide a “value added system at every stage of the journey,” notes Lambert. It wants to interact with consumers and merchants “the moment they discover different types of services” such as Pinterest, and “how to interact with them…. by sharing things… utilizing information.” The goal is “to see consumers in the wild. That is where we’ll find the killer app.”

While some see Google and ISIS entry into payment and offers “ewallets” as threats to the credit card giants (such as Amex), ewallets are a great upcoming opportunity, notes Lambert. “We want to utilize the wallet in as many ways as possible.”

Many, of course, had expected ewallets to happen sooner. Google Wallet and ISIS are well behind their initial timetables. The challenge is “to move them from novelty to value,” says Lambert. Ewallets ought to be “saving time, saving money; making things relevant; (and) stopping the ‘noise’ in the inbox.”

“From a merchants perspective, (they ought to add) incremental value,” says Lambert. “The number one thing is to make them more personalized, more targeted and more relevant.”

Amex is “spending more and more time on the consumer experience, and specifically, the mobile experience,” Lambert notes. The company is also investing heavily in User Interface design. The UI and service needs to be “distinctive, fun, and there has to be enough in it to access multiple times a day.”

Lambert feels that Amex is especially well positioned to be a great asset in the mobile wallet space because its principal assets are the things that stay consistent: “trust, consumer experience and value.”

ILM East: Ted Leonsis – Local’s All About Scale, ‘New Currencies’

Ted Leonsis, Groupon Vice Chair, American Express Board Member and Internet Pioneer , emphasized the importance of scaling for local in a global economy during a keynote at ILM East yesterday. “Indiana really matters. India matters more,” said Leonsis, pointing out that for larger companies, most growth will come from outside the U.S.

The way that growth is measured, however, is rapidly changing. “I try to follow the new currencies: time, attention and clickstreams,” he noted. “Now you see payments in pixels, facebook newsfeeds, or points and rewards. Amex has trillions of points.

While growth for “the biggest companies” comes from serving the entire international marketplaces, local needs are universal.

“I love local; we built Internet on businesss created about ‘you,’ said Leonsis. There is no bigger business imagineable. He noted special opportunities in “MoSoLo….the convergence of mobile, social, video.” Mobile will make up 88 percent of digital advertising, he suggested, citing analyst projections. “One thousand cities are ready for MoSoLo.”

Leonsis believes that the largest companies will soon be making spending sprees in the local arena. Local entrepreneurs should realistically shoot for selling their companies because only a couple of companies end up IPO’ing in the public market, added Leonsis, who is, of course, a major investor.

Leonsis noted that the largest companies such as Google, Microsoft and Cisco are sitting on almost a trillion dollars of retained earnings. “That’s pent-up cash. They will want to fill in their value chains.”

Channels are also changing, and quickly. Email usage is way down and has “become a deliverer for ecommerce push. Email is for manicure or pedicure deals,” said Leonsis, noting that Groupon and Facebook are really poised to leverage this with their massive email lists. Phones, meanwhile, are for texting. The average teen sends 70 texts a day and barely use any minutes to talk.

But Leonsis predicts that video will emerge as the new killer app as it becomes the core medium for self expression and sharing. “The YouTube phenomenon is truly amazing. We’re all become Cable MSOs.”

Video also will be key to the future of retail and education. Retail site visitors who view video are likely to stay on site two minutes longer on average and are 64 percent more likely to purchase than other site visitors, says Leonsis. Video is a foundation for “next generation commerce.”

The pursuit of closed loop network is the really big game here, Leonsis noted. Amazon has made everyone an affiliate and a reseller. Similarly, PayPal made made everyone a small business with 100 million plus accounts for money transfers and payments. eBay has made everyone an entrepreneur.

Moreover, Google has eight million advertisers on file, and invoices 20,000 advertisers. Amex has developed a closed loop system of its own, and Groupon has created “curated local commerce.”

But Leonsis is skeptical that the world of interactive local commerce is something that startups can gain traction in. “No one will give an eight person startup their social security number. Payments are not for the faint-hearted. Startups are better off looking for margin opportunities.

“I don’t want to see any business plan saying ‘I’ll be the next Groupon.’ Verticalization happens.”

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Amex’s Serve and AOL’s Patch.com Partner for Prepaid, Paperless Deals

Ease of transaction, rewards and “exclusives” will be key to the next generation of deals, and the credit card companies are determined to play a major role. MasterCard is working with NextJump for special rewards programs, and has a number of other initiatives in the space (which key execs will discuss at our Deals 3D conference next month). CitiGroup branded MasterCard, similarly, is partnering with Google to offer deals over mobile phones. Groupon is also said to be working on a credit card arrangement.

Now, American Express is revving up “Serve,” its erstwhile Paypal killer. Serve is an online and mobile commerce platform that enables consumers to preload cash on the card, and eliminate the need to print out coupons, among other things. A key part of the platform will be local deals, which will be promoted on AOL’s Patch.com, which expects to have over 1,000 hyperlocal sites by the end if the year.. Customers will need a special credit card to participate.

The arrangement kicks in this fall, launching in Eugene, ORE. Full personalization based on individual customer data will be fully developed in six to 12 months, according to Amex (via Chicago Business.)

It isn’t clear whether Patch will also be sourcing deals. Patch had previously announced a new initiative it calls “Patch eSaver,” which will show all the deals available in town every Tuesday.

Local Sites Prep for Black Friday, SMB Saturday, Cyber Monday

The hordes of shoppers who still enjoy standing in lines and fighting for parking spaces, on the “Black Friday” after Thanksgiving is an offline event. Or is it?

Local sites are prepping shoppers who want to see what’s available at the stores, including The Deal Map, Milo.com, Local.com and SuperPages. Other local media companies, including The Los Angeles Times, are helping small businesses get in on the game for CyberMonday.

American Express is also getting in on the game with Small Business Saturday, a promotion for SMBs that include a $25 gift certificate for consumers who shop participating SMBs, and a cash donation to Girls, Inc. of $1 per “like” of the effort’s Facebook page (867,594 “likes” have been registered.) We also noticed that Yelp is involved with the effort, listing several recommended local SMBs on a geo-targeted basis, which is really useful.

The DealMap’s effort is categorizing and mapping more than 150,000 unique Black Friday product offers at nearly 50,000 retail locations. Smart phone owners can use their phones to check out the deals when they are on the go, and will even be notified if they are near a deal. The site reports that 300,000 people have downloaded its app.

Milo.com is also in on the game, providing sales information and more importantly, real time inventory feeds for more than 5,000 products. Its inventory feeds will include major chains, such as Target, Toys “R” Us and Macy’s.

Local.com, meanwhile, has integrated the local and daily deals from The Deal map along with major retailer coupon codes and deals from Savings.com; loyalty card coupons from Coupons.com; and weekly circular ads from ShopLocal. SuperPages.com has also done a great job integrating various kinds of coupons.

The LA Times, for its part, is supporting Cyber Monday with a Shopping Directory that is being published in its Main News section on 11/29, and also accessible on latimes.com.

Amex Teams with Facebook for Small Business Saturday

American Express has recently been leveraging its powerful relationship with SMBs on the Web, including a tie to search engine marketing and lead generation via a deal between American Express Open and Clickable.

Now Amex is going deep with social media, specifically Facebook. It is giving up to 10,000 SMBs up to $100 of customizeable Facebook advertising.

The giveaway is on top of two other promotions tied to “Small Business Saturday,” which is designed to drive traffic to SMBs on the Saturday after Thanksgiving. These include a promise to donate $1 every time someone likes Amex’s Small Business Saturday page on Facebook (up to $500,000); and a $25 credit card refund for Amex consumers who shop at a Amex-accepting SMB on November 27.

It isn’t clear whether there is an official relationship between Facebook and Amex. But the program looks like a mutual winner for both. It kind of reminds of us of earlier SMB promos, such as one between Google and Intuit.

Facebook execs Emily White and Tim Kendall will discuss Facebook’s local initiatives during a presentation on Day 3 of ILM 2010.