Groupon is at a crossroads. The company remains a deals leader with a huge volume of customers (25 million in the US; 50 million worldwide) and one million merchants. But the company is seen as yesterday’s news by many, even as it keeps doing solid business and pivots from email to an always on, discovery-based marketplace.
New CEO Rich Williams has made it a priority to revive Groupon’s reputation and position within the industry. Last week, he released a letter defending the company’s position as a local, goods and travel leader. Today, he engaged Local Onliner in a wide-ranging discussion.
Williams, who previously held several senior-level positions at Groupon, notes that amidst all the iPad deals and travel offers, local remains Groupon’s “core mission,” as shoppers look for a one stop for all their goods and local discovery. “We’re doubling down (on local) in every way,” says Williams. Indeed, Groupon’s “people investment” to support local deals constitutes more than half of its 10,0000 employees. Local is so fragmented that “merchants need a higher touch model,” he says. “We make that big investment to help them grow their business.”
A lot of the effort will be to keep driving local discovery. “That’s core to who we are,” says Williams. Sixty percent of Groupon restaurant purchases, for instance, were sold to people who “had never heard of the business they ended up going to.”
As for the life span of the deals industry, Williams feels it is actually “super early” and that deals will remain a major driver for all commerce. “We are not running away from deals,” he emphasizes. It’s an exciting part of marketing that lets people feel like “they have won something.”
The important thing is not to be locked into stale business models. “Let’s be honest: how do you redeem a coupon today?” asks Williams. “Is it the same as 2013? Why? It doesn’t need to be that way.”
The goal, over time, is to reduce redemption friction entirely…and make it more seamless. Merchants will be able to have different ways to create offers for their customers,” says Williams. “They’ll work with different economic models.”
What will that look like? Instead of a general $10 for $20 spend deal, “you might see 10 percent off the bill, or take 20 percent off the bill” if you buy a $5 voucher, says Williams. Or you may claim offers where you may get a free desert just for redeeming a Groupon. “We see different kinds of value creation coming on the Groupon platform,” he says.
Card Linked Offers may also be part of it – a route that rival Living Social has taken with its Restaurants Plus effort in several cities. As luck would have it, I got a consumer survey sent to me last week asking if I would be receptive to a Groupon Card Linked Offer feature. It would allow me to take 15 percent off charges at participating merchants for any registered credit card and receive bonus points…all without having to mention Groupon.
Williams says it is premature to say that Groupon is going to launch the Card Linked Offers feature – it was just research. But he acknowledges there have been lots of conversations with card issuers.
Beyond the question whether deals will continue to drive Groupon in a marketplace, however, is the question of how to leverage the new “push vs. pull” dynamics in a mobile environment. And also add value to businesses with service features, such as booking/scheduling, point of sales and food delivery. The latter is a special sweet spot for Groupon, stresses Williams.
Booking and reservations have also taken off in some markets, he says. There are 1,500 to 2,000 health and beauty salons in Chicago using Groupon for booking and reservations.
Still, Willliams acknowledges that the company is late on some of these features, or narrowly-positioned. One option will be to open the platform for partners – especially in cases where merchants already have a solution. In some cases, there may also be a clearer shot at adding services in international markets that have less competition.