Groupon on the attack – launch three new features & a rumoured IPO

Business May 11, 2011 3 Comments

With the rollout of Facebook’s mobile deals offering across Europe, and the U.S. launch of their pure deals product, the obvious question is ‘what are Groupon going to do about it?’. The answer, clearly, is a lot. They’ve been making some big moves this week that remind us they’re not going anywhere soon and are adapting fast to meet consumer demands and find new incentives to keep users on their site.

Getting in on realtime deals

Perhaps the most significant move by Groupon recently, was their announcement yesterday that they are introducing realtime location deals with Groupon Now. They’ve massively expanded their deals by switching from just one great deal offered per day, to offering multiple deals to users of their mobile application based on their current location. So you can walk down the street, access the app and find out all the businesses near you that are offering deals through the site. You then redeem these deals by presenting a scannable barcode in the store or business :

The great thing about this for advertisers is that you can set a specific timeframe for your deal, so you can avoid the risk of giving away a great price at a normally popular time, such as a bar on a Friday evening when hopefully you won’t have to struggle too much to bring business in. Currently Groupon Now is only available in Chicago, but should be rolled out soon. This is a great move from Groupon as it’s offering something completely new within the system that is a direct benefit both to consumers and businesses. While many smaller businesses have found themselves stung by Groupon in the past, introducing factors such as a time limit on deals goes a long way to remedy this.

Paying users to access Groupon mobile

A rather more unusual move here from Groupon, that perhaps shows they might be a little more scared of Facebook Deals than they let on. They’re offering a cash incentive for people that download their mobile app and purchase a deal. If you do this before 25th May, Groupon will reimburse you with $10 credit to spend on deals through the site. It’s clear to see why Groupon are doing this : they are at a crucial time in their mobile side of the business, as Facebook Places steadily increases its penetration with more and more businesses ofering their own deals in the self-serve areas in the U.S. Groupon need to move fast to build up a loyal mobile offering before Facebook Deals comes out of beta across the U.S. and Europe. In essence, they need to make themselves indispensable before it’s too late. This might be a tall order given the 200 million+ mobile users that Facebook has at its disposal. But in the same way that Twitter staked their claim as Facebook gradually imitated their features on the site, Groupon can do the same. Twitter did this by adapting its offering to add new features, but without distracting from the core service itself. This is exactly the approach Groupon need to take.

Their aggressive move into the mobile space was also accompanied by their recent purchase of Pelago, who make the mobile location-based service Whrrl. With the purchase complete, Whrrl is no longer available to users, as it moves firmly into the Groupon family. The purchase also brings with it a talented team of mobile people that are going to be integral to Groupon’s development in the mobile arena. Andre Mason, CEO of Groupon announced the launch in a blog post, hinting at one of the most powerful assets they have at their disposal : “Jeff [Holden] intimately gets consumer buying behavior and the importance of a great user experience, and his team is this awesome combination of data-driven creatives…the people who create smart products that are really fun to use.” The data that Groupon can access both about customers and merchants is where they can play Facebook at their own game. We’ve seen Facebook rocket its way to monetisation through their ad product that lives and dies on the data they have on their users. Groupon can hope to mimic this, by partnering with smart people such as the Whrrl team, to build the data they have and use it in new ways.

New partnership brings live event offers

Groupon announced their partnership with events site Live Nation just yesterday, bringing offers for events near you. The new product : Groupon Live, is another much needed addition that fits perfectly with the viral and social nature of their site. Just as Facebook adapted by offering checkins to events, Groupon have moved into this area with an excellent new product. GrouponLive is due to launch in North America in the Summer, with no announcement yet of a planned rollout across Europe, though this will likely be imminent. Through GrouponLive they’re also ensuring they stay very much ahead of their smaller competitors, expanding from just one deal, to becoming the complete online and mobile home for realtime and socialised deals. Structuring the site in this way of course, positions them perfectly to seamless acquire competitors that might operate in more niche spaces. It’s not too hard to imagine their new b2b section of the site for example, that could see an acquisition of someone like Huddlebuy to bring their customers and service with them.

Groupon filing for an IPO?

Though it is strictly rumour at this stage, it looks like Groupon might be rushing to file for it’s IPO, which according to AllThingsD, values the company at upwards of $15 billion. This being the week of IPOs of course, with LinkedIn preparing theirs, valuing them at around $3.3 billion, this is an interesting move from Groupon. In the same way that Facebook go into the infamous ‘lockdown’ mode when preparing a raft of new features and developments on the site, Groupon are doing the same and they’re not afraid of moving quickly. The rumoured IPO alone shows what a staggering rate Groupon has grown at, having been started in just 2008 – a phenomenal rate to build up such a high valuation. With Sky’s acquisition as well, this is the time for tech companies to move fast, and this could be an ideal time for Groupon to float.

I’d expect much more to come from Groupon over the next couple of months. Launching so many new products so quickly means they now need to bed down and really make these work by bringing them into the core experience of Groupon for users. They can’t afford (yet) to take their eye of the very thing that made them grow so quickly in the first place : one simple deal a day, with social sharing at the centre. This is social media though, so Groupon are right to adapt and change quickly, ensuring they stay reactive to consumer demand.

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