Groupon's New App Hints At A Change In Course

Once a text-heavy app focused on daily deals, it now gives Groupon Now, Groupon Goods, and Groupon Getaways equal play. Here's the likely reason why.

The latest version of Groupon’s app—released quietly on Android and iPhone over the last month—reflects the company’s shifting focus.

Once a text-heavy app focused on daily deals, it now sports a carousal navigation that makes flipping between Groupon services like Groupon Now!, Groupon Goods, and Groupon Getaways easier. It's a sign that Groupon's greatest opportunities have less to do with coupons and more to do with those other services—and mobile.

Groupon’s revenue is still growing, but newer services such as Groupon Goods, a retail deals site launched last September, hit a $200 million annualized revenue in less than a year. The company does not break down revenue from Groupon Now, it’s real-time, location-based deals service, but it passed 1.5 million deals sold in April.

Both of these products make happy companions for mobile. Unlike companies such as Facebook and Google, which are also shifting users to mobile phones at breakneck speeds, Groupon is in the business of selling goods and services. Advertising ROI on mobile and advertising ROI on the web aren’t commensurate, but buying stuff is buying stuff. Whether users make purchases on mobile or on their laptops, Groupon adds the same amount of revenue to its spreadsheets.

Mobile apps accounted for one-third of Groupon's North America transactions this July, up 35% from the same month last year, and a June Nielsen survey found them to be the third most popular shopping apps, behind eBay Mobile and Amazon Mobile apps. Groupon's mobile penetration isn’t nearly as high internationally, but a partnership with one of the largest telecom companies in Europe helps.

Increasing reliance on its fast-growing, non-daily deals businesses hasn't necessarily pleased Groupon's investors. As AllThingsD points out, retail businesses have lower profit margins than daily deals. Meanwhile, Groupon doesn’t break down its mobile transactions by category, so it’s impossible to know for sure whether Groupon Now is sharing in the success of the mobile app or if most mobile purchases are still daily deals.

No matter how you spin it, however, Groupon’s successful transition to mobile is a bright spot in the company’s stock-price-plunging storm. Groupon CEO Andrew Mason told investors in May that mobile users spend about twice as much as their desktop counterparts.

The new app design encourages them to do so across multiple products.

"You think about some other mobile ecommerce players. They’re focused on some categories and not others, but we have the best of the mobile usecase," Fabio Sisinni, the product manager of Groupon's app tells Fast Company. "If you want something exciting now, open the mobile app. If you want to shop for something, open the mobile app."

[Image: Flickr user Robert G]

Add New Comment

0 Comments