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Groupon sinks teeth into mobile restaurant deals with Savored acquisition

September 26, 2012

The Savored mobile app

Groupon’s acquisition of online reservation services Savored is the latest example of how the company is building out its mobile offerings for merchants and other businesses.

Mobile plays a growing role in how consumers interact with restaurants by providing anyone who is hungry and on the go with a quick and easy way to find a nearby restaurant, order food or make a reservation and redeem offers. Savored, which has apps available for iOS and Android, is one of several companies offering online reservations and offers for restaurants.

“The great thing about Savored is that they are leveraging some of the most powerful aspects of mobile, social and local in a way that helps restaurants manage their demand and yield better – something that Groupon’s offering doesn’t do nearly as effectively,” said Scott Metcalfe, chief strategist at FetchLocalCustomers, Elburn, IL.

“A similar model could be used to better serve any business with a time/yield-sensitive asset such as hair salons, nail salons or even oil change facilities,” he said. 

“The key to really optimal results surrounds mobile’s ability to deliver customers almost in real time.”

Terms of the deal were not disclosed.

Mobile strengths
Mobile is playing a bigger role all the time for Groupon, which recently said that almost 30 percent of all its transactions are completed via mobile devices.

To address the growth in mobile, the company recently introduced payment services, enabling merchants to use a Groupon attachment for mobile devices to process credit card payments.

Even though mobile’s role in restaurant reservations is still small, it is expected to grow significantly.

There are a number of competitors in the online restaurant reservation space – and Open Table are two examples. However, Savored has been making some strides in driving mobile users to local restaurants, strengths that may have played a part in Groupon’s decision to acquire the company.

“It is nice to see Groupon embracing a platform that leverages mobile so well,” Mr. Metcalfe said. 

“In my opinion, this type of application is far more intriguing and holds much more promise than the ubiquitous daily-deals approach,” he said.

Groupon probably felt as though Savored’s approach provided the missing level of innovation they needed to make a more significant play in this space.”

More deals
The deal brings with it Savored’s list of higher-end restaurants that are already using mobile and online reservations.

Groupon is likely to integrate Savored into its suite of products and not keeping the brand going with the intention of encouraging consumers to think of Groupon as a destination for restaurant deals when they are looking to eat out.

 “Right now, the occasional restaurant deal doesn’t make it a go-to place when consumers are out looking for dinner,” said Peter Krasilovsky, vice president at local media research firm BIA/Kelsey, Chantilly, VA. “With the Savored database and with Groupon now, I think that more consumers will start thinking about Groupon as a place to look when they are going out to dinner and for launch.”

Restaurants deals are also an important category for filling out Groupon’s daily deals offerings. While Groupon does currently offer restaurant deals, these are typically few and far between.

Savored is currently available in 10 cities, including New York, Atlanta, Boston and San Francisco. Users can book a reservation and have up to a 40 percent discount offered by the service applied automatically to their bill.

The service enables merchants to drive consumers into its restaurants on days when business is slow and thereby drive incremental revenue for tablets that might otherwise be empty.

“Groupon needs more restaurant deals – I don’t see a lot of restaurant deals on Groupon anymore,” said John Vitti, chief marketing officer of Mobile Spinach, San Mateo, CA.

“I believe mobile will become the leading way consumers make reservations,” he said. “ Food and restaurants are already the No. 1 searched category for mobile maps and navigation, so it’s only a matter of time when functionality meets demand.”

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

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