Services & Software

Groupon gets into direct e-commerce with Groupon Goods

Top daily deal maker moves into online retailing, taking on the likes of Amazon, Wal-Mart, eBay, and Best Buy.

One size daily deals don't fit everyone--not even Groupon.


In an effort to diversify revenue and maintain its rapid growth, Groupon, which has temporarily shelved its $750 million public offering, is fast evolving its business model. Recently Groupon deals have gone mobile, real-time, and location aware.

Today's launch of "Groupon Goods," however, marks the company's most aggressive departure away from its core daily deal offers. With Groupon Goods, the Chicago based company seems to be moving into full-blown e-commerce. If fully realized, that would put the company, valued at $20 billion, head-to-head with online retail giants such as Amazon, Wal-Mart, and Best Buy. Amazon has invested $175 million in LivingSocial, Groupon's closest competitor.

Groupon's representatives didn't respond to CNET's request for comment. But it appears members will be offered deals on specific items such as electronics, exercise equipment, and kitchen wares through e-mail. A limited number of customers from Groupon's 134 million member e-mail list were notified today about the new U.S. service.

Unless you received an e-mail offer, Groupon's direct buys were hard to find on the company's home page. Business Insider managed to get hold of the new e-mail deals showcasing five products ranging from an iPhone/iPod speaker dock ($40) to a LED HDTV ($440) and an Ionic hair dryer ($69). And Groupon published a FAQ page loosely describing the new service.

In another attempt to entice customers and local merchants and stir interest in its IPO, Groupon also introduced a rewards program today. Aimed at repeat shoppers, the rewards program kicks in after a consumer reaches a certain spending threshold. Once that happens, the consumer is eligible for a discount up to 80 percent off compared with Groupon's usual 50 percent markdown. Philadelphia will be the first metro to try out the rewards program beginning on October 14.

Since filing for its IPO in June, Groupon has experienced a series of setbacks. Most recently, Groupon is slashing its reported revenues by half--from $713.4 million in 2010 down to $312.9 million--in accordance with accounting revisions prompted by the SEC. And after only five months on the job, Groupon's second COO in just two and a half years quit to return to Google, her previous employer.