The pandemic was not kind to Groupon. Which isn't terribly surprising, given that the company makes money by helping local businesses sell things like massages, manicures, escape rooms and housework. As COVID-19 forced people to retreat into their homes, the market dried up.
But the world is beginning to reemerge, and Groupon seems to sense an opportunity. Not just to get back to where it was, but to make a crucial and complicated switch from daily-deals site to an all-in-one platform for local experiences. To be the place users go not just to splurge on a massage on vacation, but to hire their house cleaners and book all their workout classes. Groupon estimates that people have about 80 "Grouponable" moments a year, CTO John Higginson said, and right now only buy a few of them on Groupon. He'd like to change that.
Groupon is redesigning its app to offer more personalization, as the company begins to invest in machine learning to help figure out what users might want to do and buy in a more detailed way. It's also improving search and rankings to make things easier to find.
But the most significant change, at least in terms of Groupon's whole reason for existence, is the app's new tools for quickly buying deals you've already bought. That would once have been anathema to Groupon's entire purpose, and the platform wouldn't even allow it. Groupon was the place to discover new things, not a way to get better deals at the places you already know.
Groupon has been working with merchants for months to try to make repeat buying work. It relaxed some of the rules on what and how a business can sell through Groupon, and gave them new tools for doing things that look a lot less like flashy coupons. The platform helps merchants figure out pricing and timing, but ultimately leaves things up to the business. "If you had been going to a hair salon for a deal they had that's, like, a complete makeover," Higginson said, "now we want that salon to be able to advertise and promote services for everyday haircuts or coloring. You can do that on Groupon."
Deals will continue to be a big part of Groupon, Higginson said, but he hopes they can be blended with regular sales in a more sustainable way. "Daily deals have a big role in customer acquisition," he said, "even in offline commerce." Groupon's also betting on that business coming back in a big way, as people embrace their Hot Vax Summer and go back to doing fun things in the world. "But then once they become customers that first time," Higginson said, "let's make it easier for them to be repeat customers." Groupon has never been good at that, but that's a big part of the company's focus going forward.
This is about to be a seriously crowded space, though. Airbnb continues to bet on Experiences, which still serves a more vacation-focused need but could become a big platform for all things local business. Yelp, Facebook, Google and the other platforms that have invested in making local businesses easier to find online are all investigating ways for those businesses to sell things through their platforms. And during the pandemic, many businesses have been forced to adapt to online ways of doing business, meaning they may not need platforms and intermediaries at all.
Higginson said his case to merchants suddenly overwhelmed with online options is a simple one. "We have the reach and the scale, we have the tools," he said. But also: "It's not like you pay a subscription to get on." Groupon takes a cut when a business makes a sale, which he hopes aligns the two sides more than an ad-supported social network. Plus, Groupon's integrating with booking platforms, calendar systems and the like, in the hopes of making Groupon a no-brainer option even for companies who also sell elsewhere.
One challenge for Groupon will be training its users to think of it as more than the flash-deals site that made it a household name. That's why the launch is coming now, Higginson said. "We think that's part of the magic of this moment," he said. Redesigning the app catches users' attention, "and allows us to tell the story about what the new, evolved Groupon is going to look like." With millions of people reemerging from lockdown and newly free to do even simple things like get a haircut or go to the dentist, there's a brief window of opportunity to insert yourself into people's new routines before the new normal sets in stone. Groupon doesn't want to miss it.
