Groupon has announced it will stop selling goods. Instead, it wants to focus on the local experiences market opportunity. Groupon announced the transformation news after a disappointing fourth quarter.
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“We did not deliver the financial performance we expected during the fourth quarter and we recognize we must move swiftly to put Groupon back on a growth trajectory”, CEO Rich Williams said Groupon. The company badly missed revenue targets, with sales of 567 million euros, while analysts were expecting 653 million euros.
More focus on services
Groupon says the plan to stop selling goods online will allow the company to focus more on services, as the “purchase of experiences continues to migrate online”. Plans for this year are to have a broader inventory, modernized products, a refreshed brand and new ways for merchants to partner with Groupon.
In 2020, Groupon will offer modernized products, a refreshed brand and new partnership models.
‘Local experiences market worth 930 billion euros’
So, Groupon will be betting on offering local experiences. A market it estimates is worth 930 billion euros and migrates quickly from offline to online. “Currently, we are a market leader, yet we have less than 1 percent market share”, the company explains. “In addition, the performance of our goods category, particularly in the fourth quarter, has made it increasingly clear that we are not well-positioned in a saturated retail market.”
We are market leader, yet we have less than 1% market share.