Just last year, we pondered if the daily deal was dead.
Our data showed declining sales on limited-time offer sites like Groupon, and we cautioned that over-relying on them in your overall ecommerce business plan was risky.
Turns out that we were right.
Following a disappointing 2019, Groupon CEO Rich Williams announced a new direction for the company: no more merchandise sales.
Groupon Goods and Groupon’s physical locations are shutting down.
By doing so, Groupon is investing heavily in the online experience and local coupon marketplaces—both of which it built its brand on but has yet to dominate.
In a statement, Williams justified the dramatic policy shift, “We believe our plan to exit goods will allow us to dedicate the focus and resources necessary to build a winning position as the purchase of experiences continues to migrate online.”
Following the announcement (which accompanied reports of Groupon missing 2019 revenue targets by almost $100 million), Groupon’s stock prices plummeted.
Given the millennial-driven boom in the US experience economy (a trend showing no signs of slowing), Groupon is banking on the fact that there is money to be made in the space in both the short and long terms.
Groupon’s assessment is that its failure to establish a foothold in the physical goods arena has proven to be a distraction from its goals.
The bet is that a refocused effort on service, experience, and local business discounts can help get Groupon to the top of the mountain—a mountain that, in many ways, Groupon helped build in the first place.
Unfortunately, this may be an insurmountable task given that of the $1 trillion experience economy, Groupon currently has less than 1% market share.
Where Do Groupon Goods Ecommerce Sellers Go?
For current Groupon Goods sellers, the Descartes Sellercloud ecommerce management platform is here to help.
If you followed our advice last February, Groupon shouldn’t be a massive cornerstone of your ecommerce marketplace business plan.
That said, there are plenty of sellers currently generating some profits there.
As sellers must adjust, the Groupon Goods customer base (small as it may be) will also look elsewhere for their purchases.
The key is ensuring your products and listings end up where those customers do.
Some likely destinations include:
Woot
Woot was once the go-to place for daily deal shopping.
Since its acquisition by Amazon in 2010, some of the original quirkiness and magic of the site (along with a once rabid fanbase) has diminished.
However, with Groupon Goods out of the way, Woot may see some extra attention from online deal-seekers.
Zulily
Zulily is a daily-deal site that has, in many ways, faced the same challenges as Groupon Goods.
Rather than abandoning the daily deal model, however, Zulily is actively working to reinvent itself.
It’s safe to assume Groupon Goods customers probably already know Zulily.
Those who don’t may stumble upon it and look for an alternative.
SmartBargains
SmartBargains is a deal site focused on unloading excess inventory from designer brands.
It’s a bit more niche than some daily deal bargain sites (as are the customers’ tastes). Still, it offers ecommerce businesses a great opportunity to operate as first-party dropshippers instead of third-party marketplace sellers.
eBay
eBay offers some of its highest-rated sellers the opportunity to be featured as a daily deal.
It is not easy to get one of these coveted spots, but increasing your seller ratings, moving lots of products, and offering highly competitive prices is the key.
Even if your business is not ready to contend at the level required to land a daily deal feature, it is safe to assume the Groupon Goods customers are not strangers to the internet’s largest auction site.
Porting your listings on eBay is a smart option.
Amazon
Amazon is similar to eBay in that very specific criteria must be met to qualify to sell a Lightning Deal.
These time-restricted deals are the favorite landing spots for online bargain hunters.
If you are currently successful on Groupon Goods, your listings will likely have a chance to succeed in Amazon’s various deal offerings.
Once Groupon Goods is shut down permanently, the marketplace may be lost, but your efforts in creating listings and optimizing your sales strategies for it don’t have to be.
Descartes Sellercloud makes it easy to shift your Groupon Goods listings to other marketplaces.
Beyond the five companies mentioned above, we have dozens of integrations with leading ecommerce channels where your existing listings can be ported and managed.
With Descartes Sellercloud, adjusting your warehouse management systems (WMS) and logistical workflows is just as simple.
For more on how Descartes Sellercloud can help you diversify your ecommerce marketplace exposure, contact us directly.
Related Posts
