Groupon Wants More Than Just Daily Deals

by Trefis Team
-81.67%
Downside
22.89
Market
4.20
Trefis
GRPN
Groupon
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Groupon (NASDAQ:GRPN) is the largest player in the daily deals space, where it competes with LivingSocial backed by Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG) Offers, Yelp (NYSE:YELP) and countless clones. Daily deals account for a major portion of its revenue, but the company is looking to expand its offerings in other categories to diversify its revenue streams. [1] The company recently outlined its intentions to become something bigger than just a group buying service or a daily deals portal. Groupon’s CEO, Andrew Mason, outlined his long-term vision for Groupon, which involves becoming “the operating system for local commerce.”

Check out our complete analysis of Groupon

Groupon wants to reinvent the local commerce ecosystem and is building an integrated suite of tools and services that serve the needs of local businesses. The company has already rolled out services such as Groupon Scheduler and Groupon Rewards that simplify business operations for local merchants.

In an interview with Bloomberg, Mason said, “Right now, we’re just this advertising solution. If we can come up with an ecosystem that local merchants use to run their business and it’s connected to consumers, then I think that’s a pretty sizable business. [2]

The article also outlines Mason’s vision for Groupon: “The CEO’s focus now is on building what Mason calls the ‘operating system for local commerce’—a suite of software and technology services that would embed Groupon into every facet of every transaction on Main Street. Mason envisions consumers using Groupon as a kind of Yellow Pages to search for new ideas on where to dine or where to find the lowest prices offered by thousands of local businesses. Merchants would use the system not only as a form of advertising but also as a touch point for every sale they ring up and a hook for bringing customers back.”

We currently have a $14 Trefis price estimate for Groupon, which is nearly 80% above its market price. The company’s share price has been hovering near its all time low.

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Notes:
  1. Groupon Is Working On A Big Pivot, Business Insider []
  2. The Education of Groupon CEO Andrew Mason, Bloomberg []
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