Groupon Morphs into (Local) Deals Search Site

LivingSocial and Groupon are evolving away from their original push email models, though email remains a critical channel for both. Accordingly Groupon unveiled a major website and mobile redesign that complete the company’s transition from a “group buying” model to a deals “marketplace” with local search at the center.

Groupon redesign

Daily Deal sites largely collapsed under the weight of too much competition and noise the market. In addition consumers were ultimately alienated by a combination of too many “irrelevant” push deals (read: spam), negative experiences with deal expiration and “bait and switch” experiences with merchants.

The new Groupon will become a destination in a way it wasn’t previously (SEO will also play a role). And the inclusion of search will change the way that users interact with it.

Before I go out for dinner on Friday I can search for places with deals on “sushi” or “Indian food,” for example. Previously it was all serendipitous discovery. Now it can be intent-based: I can look for precisely what I want — even specific places.

Groupon sushi deal

It’s hard to overstate how search will change usage of Groupon. Travel is an especially interesting area. If I’m considering a trip to Belize or Vancouver, BC I can now search Groupon to see if there are any deals on vacations to those places, which will influence my decisionmaking:

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With search the discounts also no longer need to be as aggressive. If I want to do something or go somewhere already then the deal that will get me to go or buy can be less. Previously the deals needed to be very large to motivate “impulse buying.” This is a very different scenario.

LivingSocial recently added e-commerce coupons (a la RetailMeNot) as part of its broader diversification strategy. Similarly Groupon has “Goods.” These areas of the respective sites could see considerable usage in Q4. Indeed, the ability to search for specific products on Groupon Goods makes it a definite stop online as we head into holiday shopping.

Groupon has arguably stabilized and is showing modest growth momentum, especially on the top-line. It has yet to report Q3 results. The following are from Groupon’s Q2 earnings report:

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What is your view of the redesign and whether it will help Groupon regain/sustain momentum?

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