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Groupon boosts mobile coupons with real-time transactional data

November 13, 2013

Groupon's iPhone app

Groupon is aiming to significantly differentiate its daily deal offering towards merchants hungry for more data on the in-store redemption of offers with a new tool that more closely closes the loop on transactions.

The daily deals giant is making a big push into real-world transactions with the launch of a pilot program with Sparkfly. As Groupon puts a greater emphasis on mobile as central to its future, doling out more trackable data for merchants and retailers is a logical step for the company.

“We anticipate that Sparkfly’s integration capabilities across a number of different POS systems will allow us to scale regional and national partnerships with some of the leading brands in food and beverage, health and beauty and retail,” said Nicholas Halliwell, spokesman at Groupon, Chicago.

“By enabling these brands, which often times have different types of POS systems by location, to connect with our mobile redemption and extensive campaign measurement functionalities in real time, these merchants can seamlessly redeem Groupon vouchers and better understand the success of their marketing campaigns,” he said.

Tracking real-world transactions

Groupon is integrating Sparkfly’s technology into its mobile and online experience so that coupons can be delivered on a one-to-one basis.

The coupon codes can then be scanned or typed in by an employee at the point-of-sale.

The information is then sent back to Groupon and the retailer to get a better perspective on what consumers are buying.

For example, a retailer offering a deal for a percentage off of an item will be able to see what else was purchased at the same time, with the goal of improving the type of offers that Groupon merchants push out.

With a better understanding of what else shoppers are buying in conjunction with their Groupon offers, merchants could potentially partner together to offer consumers a bundle of products from different brands.

Groupon will test the new real-time data tool at several restaurants and retailers and hopes to expand the pilot program more broadly to more national chains afterwards.

“Proving ROI and attributing physical purchases to mobile promotions is a challenge many ad networks, social networks and mobile commerce companies are trying to solve,” said Catherine Tabor, CEO of Sparkfly, Atlanta.

“By delivering Groupon real-time, item-level redemption data, they can provide better feedback to retailers and also enable manufacturers to participate in their offering,” she said. “Once Groupon and the merchants have insight into point-of-sale purchases, they can also update and optimize their deals to further drive results.”

Groupon’s iPhone app

Improving results

After several years of waning interest in daily deals, Groupon is taking several big strides to turn its business around with mobile as a primary focus.

Groupon’s third-quarter results released last week revealed that mobile sales hit more than 50 percent in September for transactions in the United States. More than 40 percent of the company’s global transactions now come from mobile.

Additionally, Groupon’s mobile app has been downloaded more than 60 million times, 9 million of which were downloaded during the third-quarter.

Groupon also overhauled its Web site and mobile apps earlier this month with a more prominent search and personalized features.

Although the results are positive, overall revenue only grew 5 percent during the quarter, missing Wall Street’s estimates.

According to data from Yankee Group, seven percent of consumers used Groupon in the past month to search for deals while shopping in a store. Twenty-eight percent of consumers respond to daily deals on a monthly basis from their mobile devices.

Part of the challenge for Groupon is moving from an email-based service to ecommerce, which is where mobile plays a particularly strong role.

As small retailers feel the heat of showrooming from giants such as Amazon, Groupon’s Sparkfly deal could give merchants a significant boost for in-store engagement.

“What is significant is that they are tacking the notion that the loss-leader model will have continuing diminishing returns, as the novelty continues to fade,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston.

“Retailers have to increase sales by huge amounts to offset the differences of the discounts they are giving via Groupon deals,” he said.

“New foot traffic only goes so far, and retailers are likely asking for data to discover what else is purchased when the consumer is attracted to a physical location or Web site by way of a great, one-time deal. If Groupon can empirically link its effect to sales beyond the initial deal offered, they can increase the value proposition in their pitch.”

According to Mr. Kerr, data is king for retailers, and small retailers in particular need access to data as quickly as possible to better inform future deals and marketing.

Linking transactions

As daily deals giants look to liven up their businesses, other companies should take note of Groupon’s use of tracking in-store transactions, according to Madeline Aufseeser, senior analyst at Aite Group, Boston.

The number of mobile and digital deal options is only growing for merchants, making it more difficult for merchants to know where to place their bets without solid data that backs up consumers’ preference for using daily deals.

“I think for a Groupon, LivingSocial or daily deal provider, this is pretty unique,” Ms. Aufseeser said.

“The daily deal providers don’t have the data right now to map back to what is purchased beyond the deal,” she said. “Whether or not Groupon has enough insights to do so because they only support a portion of consumers that shop within a retailer remains to be seen.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York 

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