Groupon is evolving from a crowdsourcing engine to drive customers to restaurants and retailers to a more targeted, time-sensitive tool.
Groupon Now offers two simple buttons – “I’m Hungry” and “I’m Bored.” The idea is simple – to match people in real time and place to establishments looking to get rid of excess goods. Here’s an example:
It’s only 11 a.m. Mason clicks the “hungry” button, and his phone transmits its location to Groupon’s servers and then displays a list of deals from nearby restaurants. Across a bridge spanning the Chicago River, the Asian fusion restaurant Thalia Spice is testing Groupon Now by offering $20 worth of food for $12. A block to the north, an eatery named @ Spot Café is dangling a $10 coupon for $6. Each restaurant has specified that its discount is good only during select hours on that particular day, when a few of their tables would otherwise be empty.
And that, Mason declares as he taps his phone and purchases $8 of savings from Thalia Spice, could turn Groupon into a combination Yellow Pages, Valpak coupon packet, and price-conscious concierge for millions of consumers. “People could end up being driven to eat by what they find on Groupon and when they find it,” he beams.
The advantage for restaurants is pretty obvious, but very significant.
Unlike Groupon’s daily deals, which tend to generate a flood of customers, Groupon Now might lure just a few, but at the right time. Rob Solomon, Groupon’s president, says the true promise of Groupon Now is to help eliminate perishable inventory—food ingredients, labor hours, and anything else that’s wasted if not used immediately. “If we can eliminate 10 percent of perishability, we can change the dynamics for small business owners,” he says. Small businesses would become more like airlines, matching supply against demand to maximize revenues. “If we get this right,” Solomon says, “we are going to influence what tens of millions of people are buying at a frequency that we have never seen before.”
Imagine sushi restaurants in particular. Sushi fans are familiar with half-price sushi nights, and naturally the restaurant cycles its inventory to get rid of the perishable food on those nights. But now they can do flash deals during the week – like all-you-can eat salmon sushi if they have excess inventory they’ll have to toss the next day.
These ideas aren’t really that new, but Groupon’s reach and restaurant contacts put the company in a position to take the most advantage of these types of apps.