Groupon CEO plans to 'reinvent local commerce ecosystem'
Moving beyond digital coupon clipping
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In an open letter to shareholders Groupon CEO Andrew Mason has outlined plans to take the firm into local ecommerce services with a series of products designed to expand beyond its core business.
"Groupon is setting out to reinvent the multi-trillion-dollar local commerce ecosystem. We are building an integrated suite of tools and services that we believe will profoundly change the way we shop locally," he wrote. "Today, Groupon is a marketing tool that connects consumers and merchants. Tomorrow, we aim to move upstream and serve as the entry point for local transactions."
Groupon wants to become the operating system for ecommerce he said, and would be relying on technology currently under development to do it. The company's SmartDeals software, which does a better job of targeting ads, was showing a 50 per cent improvement in sales during limited trials and would be rolled out to all customers this year to bolster the existing customer base, and there'll be a greater emphasis on mobile offers.
A Rewards scheme is being also trialed to give extra benefits for frequent buyers from the same merchants, and Groupon is also providing payment analytics software to vendors for its back-end, and in the pilot scheme 30 per cent of sellers have opted into this. Groupon is also trialing a bookings management system, dubbed Scheduler, and plans to offer more business analytics and processing software in the future.
Further products and services will be announced over the next couple of quarters he said, and they would increase the value of Groupon as the company changed. He urged shareholders to stick with the company as it grew, saying that the company was focused on long-term potential.
Mason has reason to be concerned. Groupon shares are close to half their value just six months ago and the company faces regulatory probes from the SEC and a shareholder legal case over its misstatement of its fourth quarter results. The UK's Office of Fair Trading is also investigating the company over poor advertising practice. ®
COMMENTS
In other words....
Our business model has no chance in hell of sustaining us, so we need to start throwing new ones against the wall to see what sticks
Pyramid Scheme
Their new business plans sound no better than the old business plan.
No other choice
Right now, as was said by LesboInMansBody (great name, by the way), Groupon has no choice but to change their biz model. They are heading for the wall very quickly. And, from what has been let out in the press so far, it appears it's not likely what they are offering is sustainable, either. Everyone would be better off if the company was just shot in the head now, rather than make us watch a prolonged death.
This whole IPO thing was embarrassing. The only saving grace for them was Zuckerberg's sage decision to spend a mighty billion on Instagram. Took the media heat off them for a bit.
Things like this are good for some laughs maybe, but too many people will be badly affected. This swing-for-the fences approach to growing the tech business has to stop.
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