October 9, 2014
Will Groupon succeed with a cash back app?
In the time since Groupon’s ouster of CEO Andrew Mason, the business has continued on a stock market rollercoaster ride. The company continues to struggle with its core business model in the wake of deal fatigue and growing skepticism by business owners about deep discounting.
Earlier this year, Groupon expanded its Goods imprint far into consumer packaged goods territory with Groupon Basics. Groupon Basics, which allows customers to buy bulk household products online, positions Groupon as a competitor with bulk sellers like Costco and Sam’s Club. Now Groupon is moving even further into the world of CPG with its newest endeavor, an in-store grocery couponing app called Snap.
An online video shows that shoppers with Snap installed on their smartphones can search through selected products while shopping to find which brand items are promoted through the app. Then, after checking out, shoppers can scan their receipts with their smartphones and receive money back on each promoted item purchased. Snap purports to work on promoted brands regardless of the store at which they are purchased.
![[Image: Snap by Groupon]](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHZpZXdCb3g9IjAgMCAxIDEiIHdpZHRoPSIxIiBoZWlnaHQ9IjEiIGRhdGEtdT0iJTJGcHVibGljJTJGaW1hZ2VzJTJGZGlzY3Vzc2lvbnMlMkYxNzgzMCUyRnNuYXAtYXBwLXN0aWxsLmpwZyIgZGF0YS13PSIxIiBkYXRhLWg9IjEiIGRhdGEtYmlwPSIiPjwvc3ZnPg==)
Vice president and general manager of Snap, Sean Smyth, said the app "[uses] the power of smartphones to make couponing easier and more convenient while paying people to shop."
Groupon acquired Snap as part of what TechCrunch describes as a "quiet" acquisition of a Toronto-based startup called SnapSaves, and absorbed not just the app, but its existing user base.
Grocery couponing apps similar to Snap, such as Shopmium, ibotta and Checkout51, have recently caught on with the new generation of coupon clippers, especially as some large grocery chains have begun to move away from traditional paper coupons, doubling-down on their smartphone-enabled customers.
Torrey Kim at About Money reports that Kroger has ceased to accept double coupons and gives tips on how to get the same sort of deals through the use of the Kroger in-store app. Elsewhere in her mobile couponing column, Ms Kim lays out an impressively thorough method — using multiple simultaneous coupon apps — to wring ultra-deep discounts out of each shopping experience. Extreme coupon clipping of yesteryear is alive and well, but with a high-tech spin.
Snap is not Groupon’s first shot at in-store grocery couponing. In its pre-IPO days, Groupon partnered with Massachusetts-based grocer Big Y Foods to offer discounts through the store’s loyalty program.
- Groupon Launches Cash For Grocery-Buying App Snap – WebProNews
- After Quietly Acquiring SnapSaves, Groupon Launches Snap, Paying You To Shop – TechCrunch
- Groupon Goes After Costco and Sam’s Club With Groupon Basics, A Portal For Home Goods – TechCrunch
- Combine Shopmium, Checkout51 and ibotta for Deep Discounts – About.com
- Use These Mobile Strategies to Save at Kroger in Absence of Double Coupons – About.com
- Groupon goes into groceries – Crain’s Chicago Business
BrainTrust
Recent Discussions
Discussion Questions
Can the Groupon brand succeed by moving into yet another new area of e-commerce? Will couponing apps like Snap be good for CPG vendors and grocers if widely adopted?
Poll
How many hoops do customers want to jump through to save a buck? I doubt more than one.
Having been the first to detail why Groupon is the worst marketing for a small business four years ago I don’t see this as a game-changer. If anything it attracts the people least likely to choose your brand because they like it—never a good marketing strategy.
When it comes to all things Groupon I wait to see what Bob Phibbs says and then agree with him!
Myopia may be the most threatening epidemic in retail today.
Groupon’s new app Snap seems to be a great way to promote their brand and also help CPG vendors and grocers. Just like having a bunch of change in a wallet, people don’t really enjoy keeping a bunch of coupons in it either. A lot of coupons sit at a desk at home and sometimes are forgotten when a customer goes shopping. I even find many customers remember at a store that they have a coupon they could use but left it at a home. They tell themselves they will come back to the store another time with the coupon to purchase the product they’re interested in, but end up forgetting or are unable to return to the store before their coupon expires.
With Snap, customers can have all of their coupons saved on their mobile devices which they always keep with them. This can lead customers to see Groupon as a reliable brand that suits their needs. It also helps CPG vendors and grocers as customers will purchase more goods, instead of forgetting to return to the store with their coupons or avoid buying a product because they lack one.
I wouldn’t bet the house on it, but Groupon needs to take several steps like this to hopefully turn its fortunes around. At least they are trying new things as opposed to sitting still.
In an ideal world, CPG vendors and grocers wouldn’t have to offer discounts, but as coupons go digital they will have no choice but to participate.
Groupon continues to be relevant in a competitive marketplace. I applaud Groupon for trying new ideas that are related to their core business: Promoting companies/products and getting consumers discounts. This is another opportunity. Will it work? There are many Groupon naysayers out there, but I say give it an opportunity to percolate and let’s see what happens.
The business model for Groupon has never been logical for me. The base may be there, but some tweaking is going to be required. It appears the company must keep moving to new areas as the customer quits buying in the previous areas. I don’t think extreme discounts will do much to help CPG vendors’ image. Consumers will just wait until the next extreme discount is offered. This will only cheapen the brand image.
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How many hoops do customers want to jump through to save a buck? I doubt more than one.
Having been the first to detail why Groupon is the worst marketing for a small business four years ago I don’t see this as a game-changer. If anything it attracts the people least likely to choose your brand because they like it—never a good marketing strategy.
When it comes to all things Groupon I wait to see what Bob Phibbs says and then agree with him!
Myopia may be the most threatening epidemic in retail today.
Groupon’s new app Snap seems to be a great way to promote their brand and also help CPG vendors and grocers. Just like having a bunch of change in a wallet, people don’t really enjoy keeping a bunch of coupons in it either. A lot of coupons sit at a desk at home and sometimes are forgotten when a customer goes shopping. I even find many customers remember at a store that they have a coupon they could use but left it at a home. They tell themselves they will come back to the store another time with the coupon to purchase the product they’re interested in, but end up forgetting or are unable to return to the store before their coupon expires.
With Snap, customers can have all of their coupons saved on their mobile devices which they always keep with them. This can lead customers to see Groupon as a reliable brand that suits their needs. It also helps CPG vendors and grocers as customers will purchase more goods, instead of forgetting to return to the store with their coupons or avoid buying a product because they lack one.
I wouldn’t bet the house on it, but Groupon needs to take several steps like this to hopefully turn its fortunes around. At least they are trying new things as opposed to sitting still.
In an ideal world, CPG vendors and grocers wouldn’t have to offer discounts, but as coupons go digital they will have no choice but to participate.
Groupon continues to be relevant in a competitive marketplace. I applaud Groupon for trying new ideas that are related to their core business: Promoting companies/products and getting consumers discounts. This is another opportunity. Will it work? There are many Groupon naysayers out there, but I say give it an opportunity to percolate and let’s see what happens.
The business model for Groupon has never been logical for me. The base may be there, but some tweaking is going to be required. It appears the company must keep moving to new areas as the customer quits buying in the previous areas. I don’t think extreme discounts will do much to help CPG vendors’ image. Consumers will just wait until the next extreme discount is offered. This will only cheapen the brand image.