What’s next for Groupon?
When I blogged on Groupon and the social buying model, I was blown away by the newness and inventiveness of this smartly social approach to commerce.
I’ve been wondering where the company goes now that they’ve conquered the major cities of US and Europe (over 50 by their count) and have brand recognition far and above the hundreds of imitators. ‘Groupons’ are so well known and commonly acknowledged that they have become a new noun.
Do they go vertical and build Groupons for highly targeted groups like women’s sports, or golf or art aficionados?
Do they white label or co-brand their hosted offering and offer it out to newspapers and businesses as a new type of merchandise and a new coupon currency?
Do they move to behavioral targeting of the opt-in subscribers to personalize each offer ala a Facebook approach?
Do they go true local like Foursquare and target neighborhood by neighborhood rather than city by city?
The recent G-team announcement from Groupon, still mostly under the radar, is making me wonder whether they are moving to make possible more than the current two-deals-per-day-per-neighborhood. Logically, the more they can push the limits of scarcity, the more deals they have per-day-per-place, the more revenue they can generate.
To understand G-team in Groupon’s words, click here. They position it as a return to their roots and a way for causes to use their coupon currency model. I don’t question their altruism but these folks are as smart social marketers and business people I’ve seen anywhere and I’m thinking there is a clue to a broader business change in the play.
It appears (and the information is really vague) that causes or ‘fun activities’ are given the nod by Groupon as acceptable and then the Groupon machine is brought in…infrastructure to host, launch and manage the promotion. A vast vendor base to match a deal with a cause.
I see this as the beginning of a new commerce structure based on social coupons for the business world. And it will solve a major growth hurdle for them.
Besides gobbling up every city on the globe (which they are), they are a bit cuffed by the need to maintain scarcity of deals and a social buying core. My take is that G-team is the beginnings of their attempt to move more and more targeted deals into areas. That’s the clearest way to get more customers and drive more revenue.
So maybe what G-team is about is a beginning of a bunch of changes and expansions:
1. Provide the Groupon coupon currency machine to causes or businesses so that more deals can be addressed daily through niche and socially inspired community fundraising or events.
Maybe the niche is not moms or racquetball players, but people who support animal rescue or clean-up-the-river or parks for kids. People will tolerate more deals with specific targets if they are causes for good. Revenue splits aside this is logical.
2. Vertically segment the opt-in list. People who believe or chose various causes are both a subset of their massive database and an expansion. One of the ‘can’t do’s’ for Groupon is to thin out the audience so thresholds don’t get tipped and filled.
3. Behaviorally target the deal recipient. What Facebook can do with advertising, Groupon can figure out for behavioral matching of a deal with a personal profile. They have a lot of customer data now; probably enough. Or they can partner with (or sell to) Facebook to make this happen.
4. Redefine local as proximity as Foursquare has and figure out how to localize from city to neighborhood based on subscriber density per location.
5. Move to hard goods not just services. They can move from services like a dinner to goods like TVs or computers or clothing with a slight twist to their methodology.
I’m fascinated with social commerce and the simple breakaway model that Groupon defined and owns today. But they will get to the point where they’ve blanketed all the cities, then the larger towns on the planet where the model can work.
Then what? How do they grow when they have everyone as a subscriber and only two deals a day?
I think G-team is a clue and some variation of my list of five above will happen…and happen soon.
