A disrupting business from the beginning, Groupon generated serious momentum with their daily deal offerings. In their hay-day, the company valued approximately $13B at it’s IPO valuation, but since then it has been a downhill slump for profits as other competitors moved in on the daily deal retail model. Four years later, the company is down 40% and forced to reinvent itself.
The Power of Small Business
Groupon is capitalizing on its substantial user base of small businesses, tens of thousands in total, many of which are not digitally savvy and are now offering an iPad-based checkout system. At a monthly fee of $10, “Gnome” will replace a cash register, track debit, credit and cash transactions, implement CRM and will ease the use for the customer redeeming a voucher. Gnome is expected to be adopted at every Groupon merchant in a more or less mandatory move with the intention that better customer data will result in better placed deal campaigns.
Shift to Customer Journey
Groupon’s Gnome is not only catching up to Square in the digital payments space, but it represents a huge shift of improvement to their customer journey. Historically, users have to dig through their vouchers, print them out, read them aloud to the business etc., which has resulted in a clumsy, convoluted transaction. Gnome has evolved from the identification of customer pain points and is an elegant digital solution to integrate the Groupon experience digitally and holistically. We don’t know if this will save Groupon but it is a pivot to being a subscription based service with an added focus on utilizing data and technology towards increased conversion rates.
The Competition is Upgrading
Digital integration is the customer journey for all businesses. Groupon’s Gnome represents an otherwise modern company who realized that an upheaval in digital processes is essential for growth. Check out how Panera Bread decided to upend the existing in-store customer journey in favor of a streamlined digital solution. Traditional businesses need to think long term about their digital strategy, both client facing and internally. Gnome serves to ease the use for customers, but it is also worth noting that Groupon’s Gnome has revolutionized the backend of tens of thousands of small businesses. The digital cash register is a smart cash register with accounting software integration. Small business can now utilize bluetooth for point of sale, log transactions instantly, connect with customers through Twitter, export to Quickbooks, and view inventories in minutes.
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