Unlike so many dot-com rockets, Groupon is a real business. Groupon gets its offers in front of eyeballs by buying ad space throughĪnd Facebook and via the word of mouth of its 13 million subscribers. But it now has customers who might never have thought of patronizing the business.
Since the resulting revenue is not only discounted but shared (typically, 50/50) with Groupon, the vendor may scarcely break even on the incremental sales. What's in it for the vendor-which might be a museum, a yoga studio or an ice cream shop? Exposure. It's a cents-off coupon married to a Friday-after-Thanksgiving shopping frenzy. That's a familiar come-on, but it's coupled with a novel element: You get the deal only if a certain number of fellow citizens buy the same thing on the same day. Act now, says the pitch: You have only so many hours before this offer expires. Groupon’s headquarters are in the former offices of Montgomery Ward, a mail-order company that failed to adapt to change in the 20th century.Groupon, a name that blends "group" and "coupon," presents an online audience with deep discounts on a product or service. Groupon Layoffs: What Happens Next?Ĭompanies that fail to adapt can fall quickly, especially on the Internet. Statista shows 22 million people buying through Groupon in the first quarter of 2022, down from nearly 54 million for the same quarter in 2014. When the company began its layoffs in August, management said the goal was to become “cash flow positive” by the end of 2022. The company did manage a profit in 2021 when it traded for as much as $50 per share.
But revenue has been falling steadily, from $2.2 billion in 2019 to an estimated $674 million last year. Groupon is still active, recently offering 50% off on memberships in Walmart’s (NYSE: WMT) Sam’s Club warehouse chain. It has been bypassed in the market by Rakuten (OTCMKTS: RKUNY) and Paypal’s (NASDAQ: PYPL) Honey, neither of which require group commitments. The idea seemed powerful at the time but has since become something of a joke. Small companies would make offers conditional on the purchases. The idea behind Groupon was that consumers would combine their buying power online to get better pricing.
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