Groupon Makes Bid To Become Local (Deals) Search Engine

groupon-logo-iconLate last week Groupon announced that it was going to make a growing inventory of less perishable deals accessible to consumers. Calling this the Groupon “Local Marketplace” the new functionality is live in Chicago and New York, soon to be available across Groupon cities:

In the last year, we’ve increased our North American selection of active deals by nearly 13 times, to more than 27,000 at the end of Q3. As of today, we’ve opened the doors so you can search and browse that inventory of deals, both daily deals and real-time Now! deals. Yes, you can actually type in a search (“pizza,” “couple’s massage,” “oil change”), and you can browse by category (Food & Drink, Beauty & Spa, and so on) and subcategory (Indian Cuisine, Massage, Yoga). You can also specify exactly where you want your deals. Just type in an address, a neighborhood, or a city, and we’ll instantly find the closest, most relevant deals for that location.

This is part of Groupon’s larger product diversification plan away from push email marketing. In another way of looking at it Groupon is making a bid to become a local deals search engine, a destination where consumers go to look for local offers and deals.

One of the criticisms of the daily deals market — and one reason why it has fallen from its peak last year — is that many push email deals are simply not relevant to users. In-boxes were (and still are) clogged with irrelevant offers. Adopting a search or directional media model helps address that problem, at least in theory.

In the old way of interacting with Groupon, consumers would simply sign up for the daily email and rarely visit the Groupon site, though some use the Groupon mobile app. In the new model Groupon wants you to visit the site on a regular basis looking for discounts on business categories where you have an already existing need: the search model.

In this way Groupon hopes it will generate more engagement, usage frequency and utility for both consumers and advertisers. People who want car detailing or botox treatments are more likely to buy such deals than those who aren’t already interested.

The challenge with a search model, however, is that Groupon will need to have much more deals inventory to make it all work. If users search and get limited or poor quality results they’re unlikely to continue using a Groupon deals search engine. This has always been Valpak’s problem as an online destination: not enough coupon inventory.

If Groupon can build up a reasonable selection of offers that have a persistent shelf life the company can make a reasonable run at this notion of a local deals marketplace.

Groupon is under intensifying pressure to convince investors that its business can survive over the long term. Euphoria has given way to skepticism and even dismissal, as the stock has lost about 90 percent of its value since the company’s IPO last fall.

Related Topics: Channel: Local | Groupon | Top News


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • ELi Chait

    This seems like something they have been wanting to do for a while, remember Groupon stores?

  • TechZarInfo

    Thanks for sharing this useful information.

  • TechZarInfo

    Thanks for sharing some useful information about email marketing

  • Tim Mayer

    While I think moving from an email program that has saturated the mind share of consumers with irrelevance to search which provides the purest form of user intent in the advertising world is a good move I see several challenges with this strategy:

    1) Search is lower down in the purchase funnel and different kinds of products are searched for rather than browsed or received in email. Users in search are in the mode of “i need an X” versus “I want to find a deal and I dont know what the X is yet”.

    2) As Greg mentions above there is a certain amount of comprehensiveness required so users will not do searches and get zero results. This is a similar problem as users have historically had in the grocery coupons space.

    3) A “local deals” search engine is not a clearly understood thing in the mind of the consumer. What goods and services are and are not included in the search?

    Groupon would be better off expanding and creating a larger more expansive search engine that would provide deals and coupons for all kinds of products and services.

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