Mobile is playing an increasingly important role for daily deals business Groupon, which reported this week that 25 percent of its offers were purchased via a mobile device in December 2011.

The company also reported that consumer and merchant app usage was up significantly, with the number of mobile app users increasing by  more than three times from December 2010 to over 9 million. Groupon attributes its growth in mobile to the growing penetration of smartphones as well as an increase in the number of deal categories available via its mobile app.

“We continue to roll out mobile tools that help merchants run their businesses more effectively, from loyalty programs to online scheduling tools,” said Julie Mossler, director of communications for Groupon, Chicago. “Many of these are currently in testing in a handful of markets – expect to see many of them implemented system wide by year’s end.”

Merchants association
Mobile plays a large role in how daily deals are accessed, with many consumers accessing deal sites and emails via their mobile devices.

To address the importance of mobile, Groupon has enhanced its mobile app with an improved user interface and new deal types, including travel deals, deals on hard goods and real-time deals.

Merchants are also an important part of the equation for Groupon and, here, too, mobile is helping the company support its proposition. Groupon reports that more than 120,000 merchant partners used Groupon’s merchant mobile app to redeem vouchers and track purchases using an iOS device or an Android phone in December.

“Unlike many consumer-direct companies that sell online, Groupon has both commerce-enabled apps and a mobile optimized version of their Web site,” said Wilson Kerr, Boston-based vice president of business development and sales for Unbound Commerce Inc.

“They are covering the right bases and, as their email alerts are opened by mobile consumers, are more likely to convert these click-throughs to purchases since they provide a user interface specifically formatted to match the device the consumer is using when their intent to purchase is strongest,” he said.

Groupon also continues to extend its mobile footprint internationally. The company said it will expand its current relationship with Nokia to bring location-based services to global customers.

Groupon and Nokia plan to work together to launch best in class Groupon app experiences for Nokia phone platforms that allow customers the ability to transact anytime, anywhere.

Turbo-charging conversions
While Groupon sold over 650,000 Grouponicus deals between Black Friday and Cyber Monday, a 500 percent jump from the previous year and had a strong December, the big question is whether it can keep up the interest in deals throughout the year once the holiday period has ended.

“The daily deal model works particularly well in the context of mobile commerce because of the time constraint issue,” Mr. Kerr said. “It is literally a here and now sale, as the timer counts down.

“While consumers might be in front of a home PC for just a few hours a day, they likely carry a smartphone at all times,” he said.

“Additionally, since Groupon can be redeemed by simply showing the phone to the retailer, real-time deals can be offered and converted via mobile very effectively.”

While Groupon raised a better-than-expected $700 million with initial public offering last year, there have been rumblings that interest in daily deals is waning.

Groupon also faces growing competition from Google, which has a growing daily deals business as well as others such as LivingSocial.

“As more daily deal sites launch mobile optimized versions of their sites and apps, Groupon could see their lead in this space falter,” Mr. Kerr said. “However, Groupon is leading in this area and it is one of very high growth.

“As consumers become increasingly comfortable with providing their credit card information to mobile retailers, checkout becomes a one or two click process,” he said. “When you combine a time limitation element to the equation, this turbo-charges the conversion rates.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York