Groupon Eyes The Luxury Market With Reserve, Its New Online Reservations System

The company built on deep discounts is trying to go high-end with a new reservation service.

Groupon is making a pointed effort to move into the luxury market with a new online reservations system called Groupon Reserve, which it bills as a way for businesses to "attract high-quality customers for luxury products and experiences."

Groupon Reserve, which launches in 10 U.S. markets today with plans to expand internationally by the end of the year, combines Groupon's classic daily-deals model, which offers discounts on a hodgepodge of services, experiences, and products, with an OpenTable-style online reservations system. Reserve will start with offers from upscale restaurants, and eventually expand to include other high-end experiences from spas, salons, and hotels. In a way, Groupon Reserve targets the customers likely to frequent Gilt Groupe, the flash-sale site for discounted luxury goods, whose food-specific vertical, Gilt Taste, folded in May.

Almost as familiar as Groupon's business model the notion of "deal fatigue," or the "Groupon phenomenon," in which small businesses that offer deals through the company become overwhelmed by demand from one-time customers who don't spend very much to begin with.

In March, Groupon CEO Eric Lefkofsky told Fast Company about his plan to redefine Groupon as a next-generation version of Costco, whose seemingly disparate mix of products works to its advantage as a business. Lefkofsky replaced cofounder Andrew Mason after Mason announced he would step down as CEO in February, after the company shared disappointing fourth-quarter and full-year results from 2012 with investors.

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