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Will Groupon succeed with a cash back app?

October 9, 2014Written by RetailWire Staff

In the time since Groupon's ouster of CEO Andrew Mason, the business has continued on a stock market rollercoaster ride. The company continues to struggle with its core business model in the wake of deal fatigue and growing skepticism by business owners about deep discounting.

Earlier this year, Groupon expanded its Goods imprint far into consumer packaged goods territory with Groupon Basics. Groupon Basics, which allows customers to buy bulk household products online, positions Groupon as a competitor with bulk sellers like Costco and Sam's Club. Now Groupon is moving even further into the world of CPG with its newest endeavor, an in-store grocery couponing app called Snap.

An online video shows that shoppers with Snap installed on their smartphones can search through selected products while shopping to find which brand items are promoted through the app. Then, after checking out, shoppers can scan their receipts with their smartphones and receive money back on each promoted item purchased. Snap purports to work on promoted brands regardless of the store at which they are purchased.

Vice president and general manager of Snap, Sean Smyth, said the app "[uses] the power of smartphones to make couponing easier and more convenient while paying people to shop."

Groupon acquired Snap as part of what TechCrunch describes as a "quiet" acquisition of a Toronto-based startup called SnapSaves, and absorbed not just the app, but its existing user base.

Grocery couponing apps similar to Snap, such as Shopmium, ibotta and Checkout51, have recently caught on with the new generation of coupon clippers, especially as some large grocery chains have begun to move away from traditional paper coupons, doubling-down on their smartphone-enabled customers.

Torrey Kim at About Money reports that Kroger has ceased to accept double coupons and gives tips on how to get the same sort of deals through the use of the Kroger in-store app. Elsewhere in her mobile couponing column, Ms Kim lays out an impressively thorough method — using multiple simultaneous coupon apps — to wring ultra-deep discounts out of each shopping experience. Extreme coupon clipping of yesteryear is alive and well, but with a high-tech spin.

Snap is not Groupon's first shot at in-store grocery couponing. In its pre-IPO days, Groupon partnered with Massachusetts-based grocer Big Y Foods to offer discounts through the store's loyalty program.

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