Restaurant deals are some of the most popular offers on Groupon, the platform that lets you buy discounted experiences and goods from retailers near you. Today, the company is launching a new service to help promote that vertical more. Groupon+, as it is called, will let people use Groupon meal deals that they pay for with their Visa or MasterCard (credit or debit cards), and when they do so, they will get 30 percent of the value of the deal back to their accounts.
Groupon+ will initially be available in 23 U.S. markets and 1,500 participating local restaurants and “other neighborhood favorites.” Later, Groupon plans to expand it to more categories like beauty, retail and home and auto services.
Groupon+ is the latest move from Groupon in what has been a long series of ups and downs for the company, both in its food and wider business. The company — once a trailblazer in the world of “daily deals”, time-based offers on services local to you — has been downsizing its operations, particularly internationally, as its business has moved on from its initial hype and to avoid going the way of many of its competitors: down and out of business.
Groupon itself has managed to stay afloat amid that drama, and has even shaped up to be a consolidator of sorts, snapping up its once-arch rival, LivingSocial, for a song.
In the food business, Groupon has long held ambitions to develop its relationship with restaurants into a bigger business, covering deliveries, point-of-sale services and more. Much of its wider ambitions beyond basic meal deals was positioned around Breadcrumb, a POS service it acquired in 2012 and used as the anchor for its strategy to expand its business not just in restaurants but elsewhere, too. It rebranded its wider point-of-sale business to Breadcrumb in 2013, and it went through several other iterations. Ultimately, though, it too was cut out in Groupon’s downsizing: it was sold last year to Upserve (more about that sale here).
Fast forward to today, and it looks like now Groupon has returned to making the basics of its service simply easier and stickier for consumers to use. Starting with the elimination of vouchers and the need to pay for services ahead of actually using them — two of the features of Groupon+ — seem to be very obvious friction points to remove.
“Being the daily habit in local means making the saving experience much more convenient for both customers and businesses,” said Aaron Cooper, president of North America, Groupon, in a statement. “With Groupon+, diners sign up once, add cash-back offers to their credit or debit card, pay and save at their favorite restaurants without any additional hassles.”
The idea behind working with Visa and MasterCard for these offers is also interesting. You could argue that Groupon was a very disruptive startup when it first opened for business in part because it was creating a new kind of platform and model for online-to-offline commerce: time-sensitive vouchers (offers were out for very limited time, thereby attracting small frenzies of FOMO buyers), that you bought in advance of ever using the good or service in question, on faith that you would actually use it, and the business would give it to you.
All that is pretty revolutionary, but also demanding a lot of consumers: Groupon was essentially hoping that mass consumers could and would change their buying and spending habits.
Ultimately, after the daily deals hype died down, it was clear that many simply did not.
So this move is a nod in the direction of conventionality, in a way. Visa and MasterCard are already very ubiquitous when it comes to paying for a meal in a restaurant, with U.S. Visa holders spending $312 billion in the last year at fine-dining and quick-service restaurants, according to Doug Rappoport, VP, Visa Commerce Solutions, Visa.
Now Groupon is hoping to tap into a bit of that to boost its own discounted meal offers. “Visa’s card-linked services enable Groupon+ participating businesses to turn manual offer redemption into an automated experience, which can help them drive incremental business and make for more loyal customers,” Rappoport said in a statement.
We’re asking Groupon if the company plans to extend Groupon+ to other categories beyond food.
Update: they are. “We definitely plan to move beyond restaurants,” said a spokesperson. “We’re really enthusiastic about the potential of these offers to translate well into other popular Groupon Local categories including beauty, retail and home and auto services.”