Groupon Goes Grocery Customer Shopping
In yesterday’s discussion on Groupon’s initial public offering and the prospects of the company going forward, Max Goldberg, founding partner of The Radical Clarity Group, wrote, "They have changed the nature of retailing. They kicked off a wave of deep discounting. They developed a system for local merchants to effectively reach and activate consumers other than community newspapers and direct mail. … I look forward to seeing how they fine-tune the service and enhance local retail."
Today, we have some insight into what that fine tuning might mean with reports that Groupon is working with the 61-store Big Y grocery chain. The deal is different for a number of reasons beyond this being the first time the daily deal site has included an offer for a mainstream supermarket. According to the Chicago Tribune, Groupon did offer a discount to the upscale Fox & Obel market in Chicago in 2010.
The new offer gives consumers the opportunity to purchase a "Shellfish Grill Pack" for $24 rather than the normal $39.99. Shoppers that want the deal are asked to enter their Big Y loyalty card number for instant credit when they check out. It is a departure from typical Groupon transactions where consumers either print out a paper coupon or use a digital version on their mobile phones.
Groupon worked with Incentive Targeting, a technology firm specializing in shopper marketing, on the Big Y offer.
Ben Sprecher, founder and VP, marketing at Incentive Targeting and a RetailWire BrainTrust member, told Crain’s Chicago Business that the typical Groupon paper coupon offer doesn’t work for companies similar to Big Y. "Large retailers with multistore environments with multiple checkout lanes like grocery stores measure delays in thousands of dollars per second," he said.
An article on the Advertising Age website suggests that the Big Y deal offers the prospect of a bigger and different future for Groupon as it goes head-to-head with coupon companies such as SmartSource and Valassis.
The deal, according to Ad Age, "potentially removes key obstacles that have kept it out of the multibillion-dollar national-promotion budgets of packaged-goods marketers." Going forward, Groupon could strike deals with large retail chains to bring in multiple consumer packaged goods brands for merchant-specific promotions.
- Groupon partnering with grocery chain – Chicago Tribune
- Groupon Goes Into Groceries – Crain’s Chicago Business
- Groupon Goes Into Supermarkets Via Loyalty Cards – Advertising Age
Discussion Questions: Does the Big Y/Groupon deal have the potential to change coupon distribution in mainstream grocery environments? What do you think it means for retailers, CPG brands and others in the coupon distribution/redemption arena?