Shifting its focus
Groupon is pivoting further away from its origins as a daily deals company, expanding into new opportunities with the aim of becoming a hub for local and mobile commerce. The latest move is the expansion of its restaurant booking and fine dining discount service onto mobile. The offering only launched earlier this month, but is now available on Groupon’s iPhone app, with Android and iPad versions set to follow. The move signals Groupon’s ambitions to move beyond the once-hyped but now declining daily deals market as it become increasingly clear that it will not become the multi-billion dollar cash cow many once thought it would.
Pivot To Commerce
Groupon has made much of its ambitions to become the ‘operating system of local commerce’. It already offers its own payments solution and is looking to shake off its reputation as being bad for merchants. Indeed, the firm claims that its restaurant services, dubbed Groupon Reserve, are attracting merchants back to the service. That’s because there is a clear benefit here to business owners. Where many were left out of pocket when they offered deals via Groupon, this new service helps them to fill tables when trade is slow at a discount they can afford. Plus, for the consumer it gets rid of the pain of having to deal with discount codes and coupons, with users able to simply book a table via Groupon’s service and automatically get money off.
But Groupon is not the only one moving into this space. Its old rival in the daily deals space, LivingSocial, is also pursuing the food industry, launching a takeaway service. That comes as local becomes an ever more attractive proposition to internet firms. There are a huge number of small businesses that are yet to make it onto the internet or mobile phones due to the costs associated and their lack of knowledge, but understand that it is key to their future prospects. The likes of Groupon and LivingSocial offer a service that enables them to go digital without the risk. But there are others vying for the space. Foursquare, Yelp and Toptable are just a few of the companies aimed squarely at small local merchants, while bigger firms like Google, Facebook and Apple are keen to get in on the action too.
Will It Pay Off?
For this move to pay off for Groupon it needs to prove that it can offer the best all-round service. That is why it’s offering payments, restaurant bookings and discounts in the hope that merchants will choose it over its rivals. But with local set to be a huge opportunity it won’t be an easy sell, particularly as Groupon burned bridges with a number of merchants during its daily deals days.
It also just got a little more difficult with news that one of its most senior mobile execs, David Katz, is now leaving the firm to take up a position at sports apparel site Fanatics. He had been with Groupon for more than two years, leading its retail and then its consumer mobile business. Groupon is now looking for a replacement, but it could be hard for the firm to find someone to fill his shoes given the recent turmoil at the firm and the ousting of former CEO and founder Andrew Mason.
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