Merchant Innovation

Groupon OS Will Add Beacons And Smartphones

Groupon had its share of positive financials to report on in its first quarter earnings yesterday (May 5), including $750.4 million in revenue and a gross profit of $347.4 million. But more importantly, on the commerce side, there were a few key comments during the company’s call with analysts that indicated where Groupon is headed with its merchant business.

In the past year, Groupon said it deployed roughly 11,000 tablets to merchants, which has encouraged the company to take Groupon’s OS to the next level. For Groupon’s next steps, that means beacons and smartphones.

“To make connecting to the Groupon platform and pages easy for merchants, our merchant facing operating system Groupon OS will further evolve to meet the diverse needs of our local merchant base,” Rich Williams, Groupon’s President of North America, said in the call. “Higher volume merchants will continue to benefit from the powerful tablet form factor, and we expect to deploy thousands more tablets to those merchants over the next year. But it’s clear from this feedback that Groupon OS needs the tablets to include beacons in iOS and Android smartphones.”

Groupon has used its merchant facing operating system – called Groupon OS – to help connect merchants to its marketplace. It comes with a suite of tools for merchants to stay connected in real time to its 105 million users of Groupon’s app.

In terms of working with it merchant clients, Williams said that by extending Groupon OS, merchants can now use the app and their device of choice to connect them to Groupon’s “increasingly open platform.” He also said Groupon plans to increase its personalization aspects with “geocentrically aware push notifications,” to alert customers when merchants nearby are featuring deals. Its push notification is currently in testing mode, but Williams indicated Groupon is “encouraged by early consumer and merchant response.”

“And with Groupon OS the DNA of Groupon will become seamless,” he said. “All of these pieces are coming together in North America and we believe they position us to continue to not only grow local in double-digits but to make Groupon a daily habit for customers and merchants.”

Groupon currently offers more than 425,000 active deals on its platform globally, including 60,000 coupons. Active deals for Groupon grew 365,000 in the first quarter, which was a 35,000 deal growth from last year’s first quarter figures.

“Our goal is to more than double the number of active deals in our site over the next year to ensure we are always in stock in our top categories and top markets. To-date we’ve had a one-size-fits-all approach when it comes to merchants, and over time we’ve come to realize that it’s too limited,” Groupon’s CEO Eric Lefkofsky said in the call.

He also spoke about how Groupon plans to attract more merchants that don’t want to necessarily discount their products or services heavily. He pointed toward the new “multi-tiered approach,” that’s aimed at working with merchants to build merchant pages.

“Pages are the entry point of our new inventory assembly line as they create a transactional relationship between us and the universe of merchants we don’t do business with today. To-date we’ve released about 900,000 merchant pages to be indexed on Google,” Lefkofsky said. “We will release more over time and we’ll populate those pages with market rate bookable inventory, so people can make reservations and book appointments right on Groupon. We will then add specials or coupons for merchants seeking to promote their services on our platform. And finally we’ll try and convert those specials or coupons into more attractive deals for our customers. We believe this approach will drive more merchants, more transactable units and ultimately more transactions on Groupon.”

 

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