Andrew Mason: Groupon To Begin Offering Deal Personalization Abroad Later This Quarter

At the Goldman Sachs Internet and Technology Conference in San Francisco Thursday, Groupon Founder and CEO Andrew Mason took to the stage to talk about the daily deal behemoth’s newly-minted position as a public company, its roller coaster ride both leading up to and since its IPO, as well as plans for the future.

There was a lot of pressure bearing down on Groupon in the months leading up to its emergence on NASDAQ, with many grumbling about its overvaluation and undercooked business model, among other things. After listing its initial offering at $26 a share in November, the company’s stock today has dropped to $20 a share, after a series of ups and downs.

It also recently shared its first earnings report as a public company, missing expectations, losing $350 million overall and seeing $137 million in international operating losses. Most of this loss, however, could be attributed to the company’s aggressive international expansion, as 70 percent of its some-10,000 employees are now overseas.

Though one might be able to say this about any number of points in a company’s history, it does seem that Groupon is entering a crucial phase of its development. In just three years, it skyrocketed to domination in the deals space, raised multiple massive rounds of funding, and piloted a successful (and huge) IPO. The quiet period (pre-IPO was tough on the company, exposing many of its inherent weaknesses, but “toughening it up,” Mason said today.)

That’s all well and good, but there are appallingly low barriers to entry in the daily deals space, and while Groupon deserves much credit for maintaining a firm grasp on market share in spite of a slew of competition (much of which has now receded), it must now transition from Groupon 1.0 to Groupon 2.0. The company is well aware that it needs to deliver longer-term value to both merchants and customers if it is to continue outpacing competition.

Groupon is focused on closing the redemption loop on its platform, and enabling merchants to encourage repeat visits to their stores, and distance itself from its reputation as platform that encourages bargain hunting and not loyalty. Mason says that he and the team believe in the success they’ve had in bringing marketing to small businesses, and that they are eager to continue expanding on their mobile services by shipping mobile devices with pre-installed merchant apps, for example, that can be used by its merchants to track redemption and collect data on customer spend.

It has been piloting Groupon Rewards, a program that serves rewards to repeat customers based on their credit card information, and Mason said that he believes that the “paper model of redemption” is on its way out.

Over the last few quarters, Groupon has been spending an increasing amount on international marketing efforts, and questions from the audience brought up the discrepancy between the company’s U.S. business and its international efforts. “There are big differences now in Groupon’s business in the U.S. versus internationally,” Mason said, “but we’ve seen the model work wherever we take it — besides China.” The company’s efforts in China have been a widely-covered disaster, but Mason was firm in the belief that Groupon would still be successful elsewhere.

He attributed some of its problems in international markets to the fact that the company is just simply farther along technologically in the U.S. “But that’s starting to change,” he said. Why? Well, the CEO clearly has big hopes for rolling out deal personalization overseas, as the company already serves personalized deals in the U.S. based on location, gender, past buying behaviors, and other criteria.

Up until now, Groupon hasn’t offered any of the same deal personalization features on its international platform, but that will be “starting to change later this quarter,” the Founder assured the crowd. Groupon has taken an approach to global expansion that involves replicating its playbook in city after city, but questions remain over whether or not it can sustain its growth on a diet of daily deals alone.

And now it appears that there is some evidence that Groupon is testing an Amazon-like commerce platform abroad, with the company now using international markets as testing grounds for new services. With personalization moving abroad, and in testing more robust shopping experiences, Groupon is hoping that its aggressive spending on its global business (and transactional advertising) will be a valuable investment in the long term.

And perhaps a VIP service, too.