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Groupon re-invents itself as coupon marketplace

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Groupon re-invents itself as coupon marketplace

The shift was spurred in part by the changing consumer landscape. As company co-founder and CEO Eric Lefkofsky says, Groupon didn’t necessarily want to sell its customers pizza coupons in the early morning; they wanted to sell pizza coupons when its customers were in the mood for pizza.

The result of the new strategy is a marketplace of 60,000 coupons where customers can search for and buy deals in real time. The companies and brands range from small, single-unit operations to big names such as Macy’s, Sephora, and American Eagle.

What separates Groupon from other e-commerce companies is the volume of its business that comes through mobile devices. According to Lefkofsky, there have been more than 60 million app downloads overall, including more than nine million downloads in the last three months alone. Lefkofsky also says more than 50 percent of Groupon's business in North America is done via mobile.

Groupon’s competition in the digital coupon marketplace includes Amazon, Living Social, and Retail Me Not, amongst others. Throughout the interview with Bloomberg, Lefkofsky stressed that Groupon had local roots, ones that would ensure the company remained profitable despite entering a very crowded marketplace. He said the company serves merchants as well as consumers. According to a recent survey done by Groupon, 60 percent of consumers who bought coupons had never previously shopped at those retailers before.

As Melanie Williamson writes, regardless of the competition, the new platform will benefit the company in more ways than one. More coupons will mean more visibility for the website, which will increase profits. Williamson also writes that the profit margins in the digital coupon market are significantly higher than those in the daily deals market. The digital coupon market also requires less staff to operate, and will attract more national brands than daily deals would.

With the holiday season about to officially begin with Black Friday, Groupon hopes its new layout and features will facilitate shoppers during the busiest weeks of the retail season.

Author

Salim Valji

Date

2013-11-27 15:44

Author information


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