Deal Maker

DM: So Mihir, everyone would probably imagine they know Groupon, but give us the quick overview if you would please.

MS: Sure. There are three elements to our Marketing suite. The first is the Daily Deal, which helps consumers discover new businesses locally. It changes way people shop, and helps local businesses to acquire customers. We have an app for this on every platform in the US, and elsewhere, on iPhone, Android, and sometimes a HTLM web app version, and we expand as it makes sense.

DM: So when the offer/coupon is sent to the consumer’s phone and presented at the till, how does the merchant redeem it?

MS: The merchant has an equivalent app to scan the barcode and track the purchases. It’s a self-contained system that just tracks the redemptions without any integration with the merchant’s POS systems. Our goal is close the loop on the offer in the simplest way possible.

DM: OK, what’s the second element?

MS: This is Groupon Now, which is a yield management tool. Let’s say you have a restaurant that wants to fill just these tables, or a bakery that needs to sell some stuff that’s going off. Groupon Now is a real-time offers product focused on what you want to do now.

Then the third element is Groupon Rewards, which is currently in beta in the US. This is an acquisition and retention too, where the merchant says, for example, that every time someone spends $100 with them, they will give that person $15 that they can redeem any time, using the debit or credit card they have on file with Groupon to claim the reward. It’s available within the Groupon app, it’s very easy for the merchant to manage, and it shows the consumer the progress they are making towards earning the reward.

DM: And looking at mobile usage on Groupon, what trends are you seeing?

MS: In December 2011 in the US, 25 per cent of Groupon coupons were purchased on a mobile device, which just shows how far we have come in mCommerce. There were more than 9m users of our mobile app in December in N. America alone, that’s a more than threefold increase over the same month a year previously. On the merchant side, we had 12,000 small businesses merchant partners using the merchant app for redemption and tracking purchases. In the UK in December2011, we saw 8 per cent of vouchers purchased in the mobile apps, and in Singapore, the figure was 19 per cent, so we are seeing tremendous growth.

DM: When did the app launch?

MS: The US app launched in April 2010 for the iPhone, the international versions launched a year later, in April 2011. 

DM: And where is the growth coming from?

MS: The local deals is one area, but our Travel product, Groupon Getaways and Groupon Goods, for gadgets and other products,  are also doing really well. The travel deals have surprised us, because the price points are higher, but people are buying them; once people get used to using Groupon on their mobile, they will use it for all types of deal. 

DM: And what do you say to those people who accuse Groupon of being a bit spammy, targeting people with a lot of offers that are not that aligned to their needs and interests?

MS: I don’t think any consumer ever gets tired of deals, and we make it so easy to purchase that there’s no way that trend is going to go away. On the business side, no one gets tired of getting new business, new customers, or repeat customers, and our new product does that as well. We try to make it really easy for the local business owner to run their business and find new customers.

On the consumer side of things, we have a real focus on personalisation, and we invest heavily in it; we ask people for their gender, for the kind of deal types they are interested in, and we look at explicit (expressed) and implicit preferences. We have also introduced the thumbs up or thumbs down technique for our users as another way to get an explicit input. What we are about is helping consumers with local discovery, helping people to get introduced to an activity or a spa or a restaurant they would never have gone to or heard about otherwise, and the only way to do this to show you all these deals. No one would not want to discover these things; it’s how we have managed to expand from one country to 48 in just two years. 


Mihir Shah is VP and general manager of mobile at Groupon