Four years ago discount website Groupon brought daily deals commerce into the mainstream offering users bargains and discounts on spa treatments, fine dining and hotels, amongst others. Since its 2008 launch in Chicago Groupon has grown at a rapid place quickly expanding into some 48 countries.
However, in December 2010 the Advertising Standards Authority (ASA) referred the site to the Office of Fair Trading (OFT) over ‘serious concerns’ after it broke UK advertising regulations more than 50 times in less than a year. In March of this year the OFT ruled that Groupon needed to change its trading practices leading UK and Ireland managing director, Roy Blanga to admit Groupon customers had “experienced the negative side effects of our growth” and that “we’ve messed up.”
Since then many have criticised Groupon in the UK of “lagging behind” its contemporaries such as Wowcher, LivingSocial, regional sites such as itison, and its US counterpart. Speaking to The Drum Blanga defended Groupon UK commenting: “Groupon is only two and a half years old in the UK so, it’s fair to say the technology we have has not had the time or the opportunity ‘lag’.
“Many companies have tried to replicate what we do – but none of them have been able to develop as quickly and engage with the level of businesses as we have. What people tend to underestimate is the dual nature of the Groupon model. We are both a technology company and an operational company. You cannot deliver the service we deliver without both sides of the coin.”
Blanga also defended criticisms that the UK offering falls behind its US sister, adding: “The US is Groupon’s largest market and this is why most of our technology is developed and tested there before being rolled out to our other markets.”
David Katz, vice president and general manager for consumer mobile at Groupon agreed with Blanga adding the company was “actually pretty aggressive about rolling out new offerings into the UK market” and “it’s not entirely accurate to say everything comes out of the US.”
The latest Groupon offering to roll-out onto the UK market, in the near future, is ‘Smart Deals’ which has been jokingly referred to by chief executive, Andrew Mason, as a feature to stop it “sending pole-dancing offers to men.” Launched in the US in February the feature “enables subscribers to enjoy a more personalised offering with customers receiving more targeted emails based on their location, gender and previous purchases,” according to Blanga. Katz explained to The Drum how this would also be incorporated into Groupon’s mobile platform, adding: “What we’ll be doing is trying to organise deals so that when you open the application for the first time the deal that you’re going to see is the most relevant the one that is most appealing to you. It’s not about having a mobile specific deal, its more about how we sort to make it easiest for you to get the best deal that you want quickly.”Blanga highlighted to The Drum that Groupon “sees itself as the ‘go to’ destination for people who want to try new and exciting experiences,” continuing, “we see ourselves as an experience-provider rather than a voucher or discount website. We are continuing to focus on technology in order to grow.”
Part of that technology is mobile and in August Groupon launched a “substantial re-working” of its mobile application which Katz explains was done to “make the experience on mobile as good as, if not, better than the experience on a desktop.”Speaking about the mobile side of Groupon, Katz explained: “Groupon is in a fortunate situation as we are a commerce company and, I think, some companies who rely on mobile advertising for their revenue struggle a little on the mobile. “For a commerce company like Groupon our business model transitions onto mobile very easily users can do the same things on their mobile device as they can on the desktop, from a business point of view we make revenue in exactly the same way and so it’s really very seamless for us.” Despite complaints, stories of merchants being unable to cope with demand, claims of unfair pricing and misleading terms of advertising Groupon still boasts over 38 million users worldwide. The Drum asked Blanga how he thinks Groupon is viewed by British businesses, to which he replied: “With many high street businesses struggling in the current economic climate we are keen to be seen as a core part of a business’s marketing mix, helping them to bring new customers through the door.“The Groupon offer is just the trigger to get a new customer through the door, once they are there [it is the merchant’s chance to] develop a relationship with them for the long-term, encouraging them to return.”
Roy Blanga, Groupon MD UK and Ireland
David Katz, global vice president and general manager of mobile