Groupon Can Still Save Itself With Beacons

Nov. 18, 2015, 7 a.m.

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When ABI Research first started to look at the potential for BLE Beacons in retail, Groupon stood out as a very obvious candidate. Its business model is based on the ability for consumers to discover heavily discounted offers nearby, with the ability for instant gratification. The problem was that the location range was too wide, the choice of offers too broad/untargeted and the time between buying and redeeming a deal meant that instant gratification was somewhat lost. From the retailer perspective, the selling point was the ability to attract new customers. The reality was price sensitive consumers loyal to offers not stores, leading to the emergence of a very derogatory term for coupon users in restaurant circles (don’t worry, we all used them).

A large BLE Beacon network would not only help to solve alot of these problems in one go, but actually represents a significant evolution of the local deals space. Now, offers can be delivered within range of a retailer, enabling instant redemption and gratification, and over time, more targeted offers. It will also enable Groupon to move into smaller, daily deals that should be more appealing to retailers as it has a much stronger potential to attract repeat customers. With the creation of this beacon network and a large installed base of Groupon app users, it would also open up the potential to sell advertising and/or become ingrained in the SME local search business, which is probably one of the main reasons why Google offered $6 Billion for it all those years ago.

Aside from one public statement on beacon testing, Groupon has yet to do anything of note, despite Facebook and a host of start-ups building out SME BLE Beacon networks over the last 12 months. ABI Research understands that Groupon had actually been ready to pull the trigger on Beacons, but the recent boardroom upheaval and subsequent restructuring has significantly slowed this process down.

Groupon was a phenomenon when it first arrived. By delaying on beacons, it will enable someone else to become “the new Groupon”. Meanwhile, the old Groupon’s share price has fallen by over 65% in 2015. There is still time, but it is running out fast. The phycology of local deals remains the same, but ABI Research beleives that Beacons (and all indoor location techologies) enables a more effective way of tapping into it, which benefits both consumer and retailer. We don't know just how far Groupon has fallen, but beacons represents potential redemption of a different kind.