Groupon CEO plans to ‘reinvent local commerce ecosystem’
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. ®