Back in the day when deal sites were all the rage and Andrew Mason was still CEO of Groupon he would talk about "clones" all the time. Clones being competitors. It seemed he used the term in a derogatory manner that always struck me as odd.
In every large fast growing market I have been in, Internet service, email security, social media analytics, and online deals, the market is flooded with competitors. It's flooded with competitors that are pretty much the same sans positioning. It's the execution that wins.
Regardless Groupon is making some interesting moves. Groupon has changed it strategy of sending out daily emails for short-term running offers to building an e-commerce marketplace of longer-running deals that can be searched for on its website. This is a powerful move with great operating leverage. It is actually this exact same model that attracted me to Half Off Depot back in 2011. It was Half Off Depot's model. And it works.
So after my somewhat gushing Groupon earnings call summary, here's the other side of the coin. One of the things that CEO Eric Lefkofsky said during the call, and it has become a major talking point since, is that Groupon wants to become the first place shoppers turn to when they "want to buy anything, anywhere, any time."
They have a long way to go.
The first place I turn is Amazon. The second place is eBay. The third is a speciality store such as Apple, B&H, Nike, Tennis Express and the like. Groupon not so much. The fulfillment experience is lacking.
But this is perhaps more interesting. The place that I check last is Google. And what I do is search on the product name and the word coupon. My daughter told me to do so about three years ago when she was twelve. Seems that all the kids are doing it. An ingrained habit.
And more often than not I end up on RetailMeNot. Nearly every time I buy something on the Internet. Because of this behavior RetailMeNot is hot. They went public about a month ago (SALE) and the stock is up about 20% since then.
Where you end might be more important than where you start. And both of those behaviors seem a little cemented to me.
Disclosure: nCrowd, Inc. has an affiliate relationship with RetailMeNot, Inc.
On Wednesday Groupon (GRPN) announced their second quarter earnings. The stock market reacted quite favorably sending the stock up 22% in a single day. That is quite the dramatic recovery for a company with a pretty solid record of missteps with the financial community. This is why the stock is moving.
Groupon named co-interim chief Eric Lefkofsky as its permanent CEO and named the other interim chief, Ted Leonsis, as chairman. This greatly reduces uncertainty and adds stability.
Mr. Lefkofsky is quite proficient at messaging. He communicates in easy to understand phrases that investors and normal people understand.
In Groupon’s core North American market, sales rose 45% to $377.2 million,
This sales growth is being driven in part by a business model shift away from pushing deals to email subscribers toward becoming a marketplace where users can find deals when they want them. While Groupon has stopped using the word clone, they are in fact copying the nCrowd model (and I am pretty sure they are aware of us and understand the leverage of our model) of having longer term offers in an ecommerce store, which they call Deal Bank. Going from a daily deal to a deal marketplace is a huge change.
Mobile is also driving this growth with nearly 50% of sales coming from mobile. The financial markets are fond of mobile right now.
The company met or beat Wall Street expectations for the second quarter a row after several misses. In the tech world public company misses get punished greatly and exceeding expectations is well rewarded (this BTW is something that a good executive team can manage, indicating to the Street strong management is now in place.)
Groupon's stock is now up 126% YTD and almost 400% since it's low last fall. The company's market capitalization now stands at over $7 billion putting all those "you should have taken the $6 billion from Google" stories to bed for a while.
I expect Groupon to continue to show strong results in the second half of the year. It also seems to me that might be setting up to jettison their EMEA business into which they expanded to quickly.
Groupon is the big battleship in the huge local ecommerce ocean. And a rising tide lifts all boats. What is good for Groupon is good for nCrowd.
I don't think so. They are just not doing it right. At nCrowd our directly attributable social conversions are apporaching the referral traffic noted in the report. Of course that means our referral rate is much higher. My only conclusion is that the retailers in the study are not wasting their time investing on social. They have just not tuned the dials to see stronger results yet. They will, and over time the ecommerce traffic from social will rise toward its share of overall Internet use.
Interesting new report out by comScore and UPS, Pulse of the Online Shopper. The most amazing snippet to me is that 47% of shoppers are willing to have a retailer send a coupon to their smartphone when they are in-store or nearby. Seems like a sea change from not that long ago.
That post the other day about room to grow in the mobile coupon space. From the Groupon Q1 earnings call this is what it looks like today for them, one of the leaders in local couponing. Sales via mobile have risen to 45%. There's gold in them devices.
VentureBeat reported today that Fab just closed a $40 million round led by Andreessen Horowitz. Fab is an oft talked about company in the halls of Half Off Depot. Before today I do not know about the company's pivot from a social network for gay men. Interesting.
(1) A laser-like focus on design. From the design aesthetic of Fab.com’s website and mobile applications, to the products that are featured for sale, to the end-to-end customer experience, Fab.com is all about good design. (2) Social commerce. More than 50% of Fab.com’s 1.2 million members have come from social sharing. (3) Innovation. Fab.com builds all of its own technology and is the world’s pioneer in integrating social and commerce features to enhance the product discovery process.
20 percent of deal users are returning for full-price purchases at restaurants, bars, salons, and other retailers
36 percent of deals users spend more than the voucher value when visiting a merchant
22 percent of them never redeem the vouchers they've paid for
55 percent of businesses reported making money on their promotions, 27 percent lost money, and 18 percent broke even
48 percent of businesses planned to run another daily deal promotion, 20 percent indicated they would not, and 32 percent didn't know for sure
70 percent of marketers in special events, health, and services made money on their promotion.
44 percent of the restaurants surveyed financially profited from the promotion, and only 36 percent of them intend to run another daily deal
The was been a lot of chatter about how there is no way a business can make money with a discounted deal. This study shows what I have been hearing from merchants, properly structured deals work. With 73 percent making money or breaking even on their promotions deals are an online marketing method that works.
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