Groupon Management Left Groping for Answers
Here’s the deal. Consumers are not going for Groupon’s daily deals in the types of numbers to make investors happy.
A Wall Street Journal piece pointed out that while Groupon Goods — items inventoried by the company and sold directly to consumers from the site — accounted for 12 percent of revenues during its second quarter, the core coupon business was down seven percent from the prior period.
Of course, not everyone saw Groupon’s last quarter in wholly negative terms despite the company’s stock selling around $6 a share.
"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," said Andrew Mason, CEO of Groupon, in a statement. "We’ve deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce."
With the Goods initiative, a member rewards program and the opening of its first Groupon Shop in Singapore last month, the company is clearing looking to branch out beyond e-coupons.
Whether these initiatives or one or more yet to be introduced will take hold remains to be seen. One thing seems clear based on a present day snapshot. Groupon’s current value, as the Journal piece pointed out, is roughly half of what Google was offered for the company a couple years back. That’s one deal that Groupon probably wishes it could get back.
- The New Deal at Groupon Isn’t Enough – The Wall Street Journal
- Groupon Announces Second Quarter 2012 Results – Groupon, Inc.
- Groupon Opens Store in Singapore – RetailWire
- Groupon Offers Rewards for Loyalty – RetailWire
Discussion Questions: What is your take on the ability of sites such as Groupon, LivingSocial, etc. to help retailers drive business results? What will Groupon need to do if it is to ever realize the lofty expectations for the company from a couple of years back?