Do you use Groupon as much as I do? I have now expanded my deal hunting to LivingSocial and Yelp Deals, amongst the many “deal-of-the-day” website out there. I read an interesting article on Mashable.com this morning on Groupon’s business strategy and future plans…
Amidst the whirlwind of acquisition rumors, Groupon decided to stir the pot some more by announcing the next (possibly the most important yet) step in its long-term strategy: Groupon Stores.
Groupon’s basic idea – offering one deal per day per city – has done tremendously well in the past, garnering as much as $20 million of monthly revenue for Groupon, but it obviously has to hit a plateau at some point.
Groupon Stores are a solution to that problem. With this new feature, shop owners can set up virtual stores with Groupon and create as many deals as they want.
Deal Saturation? Here Comes the Deal Feed
This, of course, creates another problem: with so many deals, the one day/one deal/one city model seems to lose value. This is why Groupon created the Deal Feed, which presents a personalized stream of deals, updated throughout the day. There, you can see deals posted by all the merchants you follow, your featured daily deal, as well as recommended deals based on what Groupon knows about your shopping habits.
Groupon also plans to add other features to the Deal Feed, such as connecting your feed to Facebook and see what your friends are doing, which merchants they’re following and what deals they’re buying.
Groupon’s Long-Term Strategy
“We originally designed Groupon to account for the constraints of being a small company. Since we didn’t have any merchant relationships, we limited ourselves to one deal per day. Today things are different – our biggest problem is that demand is so high, merchants often wait months to be featured,” Groupon explains its motivation for creating the Stores and the Deal Feed in a blog post.
This is a huge step for Groupon, shedding new light on the rumored acquisition deal from Google, which may be valued at as much as $6 billion dollars. Besides growing amazingly fast right now, and having relationships with thousands of local merchants (which is of huge value to Google), Groupon obviously has a clear long-term strategy that may redefine the way we buy things online.