Groupon (NASDAQ:GRPN), which launched an iPad-based point-of-sale (POS) service for retail establishments and restaurants in October last year, has been pushing to achieve its lofty ambitions of becoming the ‘operating system (OS) for local commerce’ by integrating payments and now inventory management to the POS service. The service is named Breadcrumb after the POS company it acquired in 2012.
The new inventory management area of the app allows for easy uploading of menu items and inventory count to its iPad terminals. It helps local businesses manage inventory better by providing real time inventory data. This is ideal for venues with large inventory with limited items such as bottles of wine and helps track costs better. The new release also integrates functions such as caller ID and customer identification for faster phone order entry. It does this by automatically displaying repeat customers’ addresses or saving new customers in the system for future use. The service costs $99 per month to authorize one iPad, $199 for two, $299 for five and $399 for up to 10. This is a key pivot in Groupon’s business as the daily deals giant seeks to diversify away from the deals business. 
- What Is Groupon’s Fundamental Value Based On Expected 2015 Results?
- How Much Can Groupon’s Revenues Grow Over the Next Five Years?
- What Is Groupon’s Revenue And Gross Profit Breakdown By Operating Segments?
- How Has Groupon’s Revenue Composition Changed In The Last Five Years?
- Much Did Groupon’s Revenue & EBITDA Grow In The Last Five Years?
- The Key Downside Scenarios For Groupon’s Stock
Groupon To Become The OS For Local Commerce
Breadcrumb is fully integrated with Groupon Payments, an online payment service, that the company claims to be the lowest cost option for merchants and small businesses accepting credit cards. The payment service is also integrated into the Groupon Merchants app for the iPhone and the iPod Touch. The service charges 1.8% plus 15 cents per transaction for MasterCard, Visa and Discover. For American Express, the company charges 3% plus 15 cents per transaction.
Apart from being cheaper, the advantage of the payment service is that the merchants will receive credit card deposits in their bank accounts overnight compared to the usual 2-3 business days offered by most other credit card processing services. The service is mainly targeted at businesses that run deals with Groupon, but the company is also running a pilot test offering the service to non-Groupon merchants at 2.2% (or 3% for American Express) plus 15 cents per transaction. 
We currently have a ~$4 Trefis price estimate for Groupon, which stands nearly 70% above its current market price.Notes: