GigaOM » Groupon

Why retailers should forget showrooming and turn to in-store Wi-Fi

laurielamberth — Mon, 06 May 2013 06:55:36 +0000

Showrooming. Everybody’s heard of it by now — conniving shoppers checking out a product in a retail store, then buying it online later for less. But today it makes more sense for retailers to shift their focus away from this practice and focus on harnessing the shopper’s in-store wireless experience for themselves and their brands. In addition to making mobile-data-hungry customers happy, customer-facing in-store Wi-Fi networks will bring the retailers themselves much value.

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Head of Groupon Goods Faisal Masud is leaving to take a new job

Eliza Kern — Sun, 05 May 2013 01:01:56 +0000

Two months after firing its CEO, Groupon is facing another setback: The executive in charge of Groupon Goods, the part of the company that has provided a bright spot in an otherwise struggling daily deals business, has resigned, sources close to the situation have told us.

Faisal Masud, the vice president of Groupon Goods, will be leaving the company later this month, the sources said. One of the sources said he has taken a top position at Staples.

Groupon Goods, which was started in 2011, is one of Groupon’s newer businesses and is its first push into more traditional e-commerce. It sells discounted goods from companies like Dell, and is separate from Groupon’s traditional local coupon business. Masud was hired away from eBay in 2012 to help build Goods, which Groupon announced in April had reached an annual run rate of $2 billion in global billings. Groupon as a whole had $5.38 billion in gross billings for 2012, the company reported in February.

“As we’ve discussed before, growth of Goods … has impacted our overall margins as it has grown materially over the last few quarters, reaching an impressive $2 billion annual billings run rate in Q4,” then-CEO Mason said in the company’s fourth quarter earnings call in February.

The company’s stock has been pounded since it went public in late 2011 — at one point it was trading in the 20s, but more recently has fallen into the mid single digits. Part of the issue for investors has been questions about the reliability of the company’s accounting — last March, for example, Groupon had to restate its earnings after a higher-than-expected number of customers demanded refunds.

But also driving the downward pressure on the stock price is investor skepticism about whether the company can become more than a simply a daily deals site. Many analysts think that model has limited potential, because users can easily tire of the daily email blasts, and for merchants, the deals don’t necessarily translate into a greater number of loyal customers.

Masud’s job has been to help the company become a much broader e-commerce company, a “searchable marketplace,” as Groupon executives referred to it on a recent earnings call. Our sources said Masud’s departure was prompted by tensions between the emerging e-commerce side of the company and Groupon’s local-coupon roots. Before joining Groupon, Masud was head of global shipping and fulfillment for eBay, and before that spent five years at Amazon.

Groupon told us it had no comment. We also reached out to Staples, and will update the story if we hear back from them.

Groupon has been in the spotlight most recently with the high-profile departure of CEO Andrew Mason. Cofounder Eric Lefkofsky and fellow board member Ted Leosis have been named interim co-CEOs while the company searches for his replacement. The company will report its first quarter earnings on Wednesday. The stock closed at $5.84 on Friday.

Update: On Tuesday Staples announced that Masud had joined the company as executive vice president for global e-ecommerce. The full press release from Staples can be found here.

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GigaOM Reads: A look back at the week in tech

Om Malik — Sat, 02 Mar 2013 00:30:51 +0000

A quick word: We are kicking off GigaOM Reads, a weekly column that look back at some of the important technology stories of the week and our take on the news. In addition, we will curate some of the more interesting stories and blog posts we find worth sharing – Om & Kristy.

Groupon’s 2-for-1 CEO deal: Groupon, decidedly the most non-tech company pretending to be a tech company fired Andrew Mason, founder & CEO, and replaced him with not one but two CEOs — Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis, who are taking over as co-CEOs. Not to poop on their parade, but weren’t these two gentlemen supposed to prevent the current state of chaos at the company as board members? Something stinks, and it is not kielbasa. In what seems to be a perfect exit interview, Mason had some choice things to say:

“I think in the first phase of our company, we were a glorified mailing list. We had a completely unintelligent email that we sent out once a day and we had a human sales force that was going around and procuring the deals.”

As for Mason, he is looking for a fat farm to lose what he adorably calls “Groupon 40.” I am going to miss his nonsensical utterances.

Everybody hates (or loves) Marissa Mayer & loves(or hates) Sheryl Sandberg: Well, at least everyone in media has something to say about two of the brightest and more powerful women in Silicon Valley, Marissa Mayer and Sheryl Sandberg. They were both making headlines this week for what seems to be all the wrong (or right) reasons.

Mayer wants her remote-working Yahoos to come back to the office, and while some claimed that this was the worst decision possible for the company (and its working parents), others argue that maybe we could all use more separation between work and life. Even we couldn’t decide with Mayer’s idea that the best ideas come from “hallway and cafeteria collaboration,” the fact remains — people are talking about Yahoo again.

Hoping to recreate a Betty Friedian-like social movement empowering women in the workplace, Sheryl Sandberg’s individualized take on feminism outlined in her new book, Lean In, may not strike the cord she had hoped. In fact, prominent entrepreneurial women have denounced the cause as unrealistic, while others insist that men must also become passionate change agents in order for the business world to become more balanced.

By the way, those two news items sparked a lively thread on our internal messaging system.

Technology’s worst dressed guy is emasculated by phones: Google co-founder Sergey Brin, who is not exactly Bernard Arnault (CEO of LVMH, if you must ask), feels that smartphones are “emasculating.” He was speaking at the TED conference and his comments resulted in a flurry of commentary around gender issues.

The general body language of your average smartphone user aside, his comments indicate that Glass could evolve to include cellular phone service, but the truth is that health concerns might hinder adoption by the masses. One thing that might help make Google Glass cool? Its rumored partnership with hipster darling Warby Parker. But those are minor issues, as author Mark Hurst rightfully argues. The real issue is how we as human beings will interact with people with Google glasses and how that will change our daily experiences, he said.

“Google Glass is like one camera car for each of the thousands, possibly millions, of people who will wear the device – every single day, everywhere they go – on sidewalks, into restaurants, up elevators, around your office, into your home. From now on, starting today, anywhere you go within range of a Google Glass device, everything you do could be recorded and uploaded to Google’s cloud, and stored there for the rest of your life. You won’t know if you’re being recorded or not; and even if you do, you’ll have no way to stop it. And that, my friends, is the experience that Google Glass creates. That is the experience we should be thinking about. The most important Google Glass experience is not the user experience – it’s the experience of everyone else. The experience of being a citizen, in public, is about to change.” [Mark Hurst]

Does that future scare you? Then you should read Joel Hladeck’s amusing letter from the future that talks about why Google glasses kinda went the way of AltaVista.

Getty Images

Oscars & Hard times at CGI Corral: Darlings of the big screen and red carpet took home their golden statues at the Oscars last Sunday, but not all is well for the behind-the-scenes crew. The visual effects industry is facing hard times due to foreign outsourcing and subsidies, with large and small studios alike facing layoffs and closures. You may have caught Bill Westenhofer attempting to broach the subject after winning the Academy Award for Best Visual Effects for Life of Pi before being ushered off the stage to the theme of Jaws, which now seems oddly appropriate given that thousands of jobs are dead in the water.

Talking about Oscars, congrats to PopSugar for launching PopSugar Live. Their live red carpet show from the Oscars got about a million views, putting them in the cable television territory. Who needs cable (TV) when you have broadband?

Getty Images

Fashion and tech in one place! What could go wrong: Conde Nast rolled out the red carpet for geeks during this years’ New York Mercedes-Benz Fashion Week by hosting a first-of-its-kind fashion and tech hackathon to create new ideas around how to use technology in the industry. We do admit that does sound kinda crazy and, well, Conde Nast isn’t who we turn to for innovation tips. But then again, the fashion industry is so far behind that they need to start somewhere. We would also recommend watching out for a whole new breed of fashion media upstarts that are frankly more fun and engaging than perusing dowdy Conde Nast.

Beyond Fashion Week, a handful of forward-thinking companies are already capitalizing on the use of technology in fashion, and creating a brand new way to shop, and find the perfect fit online

It is now the Internet of things:

“We are beginning to learn what it is like to use the Internet to communicate with things that are not humans.” — Vint Cerf at TED2013 (via Twitter)

We at GigaOM have been on it for a while, writing about the topic for a few years now. But now we are taking the show on the road and are hosting a series of meetups like the most recent one in San Francisco and the next one in Boulder, Colorado. Our belief: Ideally, the internet of things should fade into the background; what matters is what it allows people to do.

And what here are some stories from this week you might have missed.

Battle of the campuses: Google told Vanity Fair that it would soon be breaking ground on a new 1.1-million square foot campus, and it’s quite the contrast from Apple’s upcoming futuristic spaceship-like HQ coming in 2016. Richie King at Quartz explored what these vastly opposing architectural footprints say about the personality of each company.
Jimmy Iovine needs to make up his mind: He can’t undermine music curation without undermining Music by Beats, the company he owns and will disown soon.
Microsoft wants to be cool: And it will never be cool, according to a former Apple guy and a former Microsoft guy.
Tim Cook & Apple versus Wall Street: The New Yorker’s John Cassidy rightfully argued that we shouldn’t pity the hedgies.
The problem with Facebook data: Well, there is a lot to dislike about Facebook’s “Like” argued Alan Wolk.

Read this and other in-depth articles on GigaOM’s Flipboard channel

CEO Andrew Mason is out at Groupon

Eliza Kern — Thu, 28 Feb 2013 21:33:45 +0000

After a disastrous fourth-quarter earnings call on Wednesday that sent the stock plunging, Groupon announced Thursday that CEO Andrew Mason is no longer with the company. Groupon is currently searching for a replacement.

Back in August, Om wrote that the problem with Groupon was that it was highly valued by investors who were hoping to get in on the big deals of the social web around the time of the company’s IPO, but that Groupon was never a technology company; even if it was valued like one. For the most part, it’s really more of an online coupon business, yet it enjoyed a whirlwind IPO and was reportedly once courted by Google to the tune of $6 billion.

Groupon’s statement:

“Groupon, the global leader in local commerce, today announced a leadership change in which Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis have been appointed to the newly created Office of the Chief Executive, effective immediately, replacing Andrew Mason. Lefkofsky and Leonsis will serve in this role on an interim basis. The Board has commenced a search for a new Chief Executive.”

Groupon went public in November 2011 at in initial $20 public offering, making it the biggest U.S. public web IPO at the time since Google. But Groupon’s stock price is down 77 percent since that IPO, as it has struggled to expand and as both customers and small businesses — the fuel for Groupon’s early rocket ship — have grown weary of the daily deals business.

GRPN data by YCharts

The company’s stock closed Thursday down 24 percent following that dreadful earnings announcement, but rose 3 percent after hours on news of Mason’s departure. He has been with the company since November 2008.

Mason wrote in a blog post why he will be exiting the company. The entirely of the post follows below:

(This is for Groupon employees, but I’m posting it publicly since it will leak anyway)

People of Groupon,

After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!

I will miss you terribly.

Love,

Andrew

This piece was updated continuously on Thursday as the story developed.

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From pedicures to pet grooming, MyTime wants to be your online booking solution

Eliza Kern — Sat, 09 Feb 2013 01:09:52 +0000

Getting local businesses on board with any kind of digital marketing or payment service can be a tough sales nut to crack. But how many people really want to call up a local hairdresser or nail salon to book an appointment if an online booking option existed? In our increasingly phone-averse society, online is usually far more popular.

Which is why one entrepreneur has launched MyTime, a site that lets small businesses create profiles and sync their bookings calendars to allow customers to discover their sites and book appointments through the website, eschewing the potential pitfalls of local deal sites like Groupon.

Entrepreneur Ethan Anderson, who was previously a product manager with Google and then sold his last startup Redbeacon to Home Depot in January 2012, started working on MyTime about a year ago and just launched the site this week. MyTime has about $3 million in funding from GRP Partners’ Mark Suster, 500 Startups, Brian Lee, Jason Calacanis, David Tisch, and others.

The site, which is starting out with businesses in L.A. but looking to expand, allows businesses to create a page for their company, sync up with Yelp reviews and ratings, sync appointment calendars, and set deals for particular slots to entice customers to less popular times. The service is free to join, but companies that let MyTime promote their offers through dynamic pricing, Google AdWords, Twitter ads, and other solutions give up 40 percent of revenue from bookings that come through the promotions (excluding existing customers). Anderson said about half the businesses so far have taken advantage of the marketing option.

The site exists right now as primarily a desktop website that’s optimized for mobile, but Anderson said developing native apps is up next. He points out that while local review and ratings sites are common (think Yelp, Foursquare, etc.), the actual booking component is not as well widespread.

“Our vision for the business is that you connect your calendar once and then everything is taken care of. We bring your customers back, and we allow you to later connect with your consumers. And for the customer, it’s the ultimate convenience,” he said. “I feel like no one else has brought together the calendar and the pricing and the actual e-commerce experience. “

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The fourth quarter of 2012 in cleantech

Mon, 14 Jan 2013 08:12:23 +0000

The fourth quarter in cleantech saw attention paid to two prominent and publicly traded companies: EV maker Tesla and newly minted public listing SolarCity. It remains a transitional period for the sector as investment declines and investors look for value investments and give money to those companies able to scale with little additional capital.

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Social 2013: The enterprise strikes back

Wed, 19 Dec 2012 07:55:38 +0000

In 2013 look for the action in social technologies to be increasingly enterprise-focused. In 2012 investors soured on consumer social media companies: Groupon, Zynga, and even Facebook were deemed disappointing. Arguably, Facebook left no money on the table. As it began to show revenue from mobile by the year’s end, its stock began to recover, but the damage was done. So a different set of companies will drive innovation and perhaps a little disruption in social technologies in 2013. Look for the likes of Salesforce.com, Jive Software, and other enterprise players to make headlines in the new year.

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Social third-quarter 2012: analysis and outlook

Fri, 19 Oct 2012 06:55:54 +0000

Social media technologies continue to permeate marketing and enterprise collaboration, even if investors felt let down in the third quarter by their consumer-facing businesses like Facebook, Groupon, and Zynga. So B2B technology offerings in support of marketing and collaboration will soon steal all the social tech attention. This quarterly wrap-up analyzes these events, and provides a near-term outlook for trends, technologies and companies to watch in the next 18 to 24 months.

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Groupon targets restaurants with Breadcrumb iPad payment system

Ryan Kim — Wed, 10 Oct 2012 13:05:06 +0000

Groupon is pushing harder into payments and accelerating its pursuit of Square with the release of a new iPad point of sale system designed for restaurants, bars and cafes. Groupon is introducing Breadcrumb, an iPad payment service that builds off of Groupon’s acquisition of startup Breadcrumb in May.

The service — which encompasses an iPad, iPad stand, a mobile app, cash drawer, credit card swipe, printer, router and wireless access – will work with Groupon’s recently introduced Payments system. It will give restaurants and hospitality customers a way to update their point of sale systems and will allows employees to take orders, search for and manage menu items, process payments, split checks and view real-time sales data.

Pricing starts at $99 a month for a one-iPad system and goes up to $399 for up to 10 iPads. The plans do not include price of hardware. Groupon will install the system for free and will offer 24/7 customer support. Groupon will charge 1.8 percent + $0.15 flat for every swiped Visa, Mastercard and Discover transaction, the same as Groupon Payments, which also charges 3 percent and $0.15 for American Express transactions.

The move makes sense for Groupon, which is trying to become a broader local commerce resource for merchants. It introduced a Groupon Payments, a simpler general mobile payment system, last month, signaling its intention to compete with Square and a host of other rivals. With Breadcrumb, Groupon is creating something designed specifically for the hospitality industry. That might be an opportunity because Square Register, Square’s iPad product, is not designed specifically for restaurants. Many cafes and some small restaurants already use Square but it’s not as popular with bigger restaurants, who often need more robust features.

Groupon is under the gun to find some businesses outside of its core daily deals. Payments is one piece of the puzzle as it looks to build a local operating system for merchants. Buying Breadcrumb gets Groupon in the door with restaurants but we still have to see if Groupon can provide all the services and features that businesses want. The company wasn’t established with payments in mind so it will be interesting to see if it can win over a lot of customers as it expands its business.

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With Savored buy, Groupon moves further away from daily deals

Ryan Kim — Mon, 24 Sep 2012 18:39:12 +0000

The daily deal is not so hot these days, something Groupon is well aware of. That’s why it continues to expand into new areas like products sales with Groupon Goods and merchant services with Groupon Payments and Rewards. The latest sign of its move away from daily deals is Groupon’s purchase Monday of discount restaurant reservation service Savored for an undisclosed sum.

New York City-based Savored is structured quite differently than Groupon’s original product. Instead of getting merchants to offer a deep discount, with the proceeds split between Groupon and the business, Savored requires consumers to make a reservation at a nice restaurant at a specific time. When they secure a table, they get a discount usually between 30-40 percent off. Savored used to charge users a $10 fee to make the reservation but dropped that in May in favor of taking a small fee from the restaurants.

Since the service began three years ago, more than a thousand generally higher-end restaurants have signed on to use Savored’s reservation system, which now operates in ten cities. Groupon said it will continue to operate Savored and will not close it as it has done with other acquisitions.

Savored works as a yield management tool for restaurants and, as such, will work alongside Groupon Now, which also tries to help businesses sell unused inventory. The purchase is another indication of how Groupon is distancing itself from the daily deals market. Groupon, which helped popularize the daily deal, is experiencing slowing growth with its core product, with users spending less on the service.

The big problem with daily deals is that merchants were giving up steep discounts and sending half of the revenue back to Groupon on the premise that Groupon users who were introduced to a business were likely to come back as regulars, something that doesn’t happen that often. Also, merchants were often seduced by the ability to get some of their Groupon payment up front, kind of like a payday loan, though some ended up going out of business when they couldn’t honor all of their Groupons.

Savored is different in that it gives restaurants a better shot at driving traffic at needed times, without having to give up as much profit or risk being labeled as a desperate discounter. Savored’s Ben McKean co-founder and CEO said in a blog post that many restaurants increased their bottom line by 50 percent after joining Savored. I can’t say for certain but I’m not sure most Groupon restaurants can say the same.

Generally speaking, daily deals can work for some verticals, but they aren’t effective for many merchants. The company’s real future is in selling discount goods through Groupon Goods and being what CEO Andrew Mason describes as an “operating system for local commerce.” Both of those businesses are still unproven and there’s no guarantee they will succeed. And even if they do, will likely offer much leaner margins than daily deals.

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