07May

Beyond The Daily Deal: Groupon’s 170M Deals And 33M Users; Aims To Be ‘The OS For Local Commerce’

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Groupon’s CEO Andrew Mason today posted a letter to shareholders with some updated figures on how the company is doing, and a more specific outline of what Groupon plans to do to to move beyond daily deals: ”To become the operating system for local commerce.”

The move is a significant one as Groupon attempts to shore up investor confidence amidst a series of accounting issues, and the fact that some believe interest in the basic service of daily deals is beginning to wane.

It also underscores some of the challenges Groupon still faces as a company. Mason notes that at the moment there are “10 million geo-located subscribers engaging with Groupon every month who have yet to make a purchase.”

“Though the six months since our IPO have been rocky to say the least, the fundamentals of our business have continued to improve,” wrote Mason in the letter.

Mason’s letter today (on Groupon’s blog and also filed with the SEC), is a long one, and here are some of the highlights.

First he took investors through some of its milestone usage figures:

  • The company has now sold 170 million Groupons to date and counts 33 million active customers and 250,000 merchants in 48 countries.
  • In 2011, $2 billion in business sent to “Main Street” small merchants.
  • Also in 2011, 11 new products launched, including a several that take the company away from the daily deals format Groupon Goods, Getaways, Rewards, Now!, and Scheduler.
  • 11 acquisitions, including several in the mobile space in the year.

Meanwhile, Mason’s description of the next phase for Groupon is light on the specifics of what it will do, but essentially, the plan is for the the company to integrate those acquisitions and more in an attempt to create a platform for local commerce — which Mason says is a multi-trillion-dollar business.

“Today, Groupon is a marketing tool that connects consumers and merchants. Tomorrow, we aim to move upstream and serve as the entry point for local transactions,” he writes.

Mason notes that there have been several key achievements already in its plan to develop a platform. Among them, he says the company is continuing to hone its personalization algorithm. (His example is the area of SmartDeals in Chicago, which he says have a 50 percent higher purchase rate than emails sent without them — and if that means less offers for vajazzles for me, well then that’s awesome news.)

Mason says that Groupon is now rolling out SmartDeals outside of the U.S., with a broad rollout planned by the end of 2012.

Mobile is another area where Groupon is going large — not just in terms of acquisitions. That’s because apparently, according to Mason, the average Groupon mobile user spends more than 50 percent more than those who are not using mobile.

He notes that last month (April) nearly 30 percent of North American transactions were completed on mobile devices — although that doesn’t seem like much of an improvement than four months ago when it was 25 percent.

Mason doesn’t go into detail on this here, but Groupon has, among other acquisitions, bought companies that bring it closer to the point of sale so we may well see the company offering more services here and trying to be more active in the mobile payments space.

Mason also noted that its non-daily deal service — Groupon Now — has recently passed the 1.5 million items purchased mark. That’s a fair distance still from Amazon and other companies that are more established in straight e-commerce, but it’s a start.

Groupon Rewards, the company’s loyalty program, has now signed up about 30 percent of all eligible daily deal merchants.

And the company’s booking management service, Groupon Scheduler, is in the process of being upgraded, Mason says, with plans to offer “a fully automated yield management system for every local business.”

He notes: “Scheduler embodies our intent to provide every mom and pop store with powerful technology solutions that were once reserved for sophisticated corporations with multimillion-dollar budgets.”

“The company has seen revenues grow by 415 percent over 2010 to $1.6 billion in 2011, noted Mason, with its operating margin still showing the company at a loss — but significantly less so than before: it’s now at -14 percent for the full year compared to -134 percent a year ago. In terms of earns per share that loss is down to $0.12 compared to $0.48 a year ago.



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09Apr

Zoomingo’s New App Turns Spotting And Rating Deals Into A Game

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Shopping discovery service Zoomingo, which helps you find nearby sales using your mobile phone, is out with a new iPhone app that introduces a gamification element to its platform. Local shoppers are now being encouraged to share the unreported sales they spot in the wild as well as rate those spotted by others.

By playing the new “Hot or Not” game within the app to rate deals, shoppers earn points while also training the service’s branded “ZoomSense” recommendation engine to present more deals matching their interests.

Points can be totaled up for a chance to win a weekly prize, too. For example, the weekly prize following the game’s first week was a Tory Burch Tote. (You can see it over here on Zoomigo’s Facebook page).

Zoomingo, for those unfamiliar with the service, is a mobile shopping platform from language learning service Livemocha’s co-founders, Shirish Nadkarni (Zoomingo CEO) and Krishnan Seshadrinathan (CTO). The company launched back in October with a focus on clothes, shoes, jewelry, handbags, beauty and home products – products that appeal to the everyday bargain shopper, not necessarily the daily deal seeker.

Sales data for the app is compiled from over 70,000 retail outlets, including Nordstrom, Macy’s, JC Penney, Williams Sonoma, Target, Kohl’s, Dillard’s, Wal-Mart and more.

Explains Nadkarni of the new Hot or Not game, it not only helps Zoomingo showcase more deals like those from smaller boutiques and local shops – areas where its data-sourcing techniques are limited – it also serves the dual purpose of helping customize the app to cater to shopper’s interests. The more you play (in theory), the better the recommendations will become.

The game itself is really simple – you just tap the “thumbs up” or “thumbs down” to rate an item, or, if you have no opinion, you can tap “skip this” instead. Each rating translates to 5 points. The top 50 points earners for the week are entered into the contest (a raffle).

Nadkarni says that today, Zoomingo users are rating over 20,000 deals every day, and are saving thousands of items to their shopping lists daily. The app is also listed in the top 10 of iTunes “Catalogs” category in the App Store. However, although the community may be engaged, it’s still relatively small – the service has over 100,000 to date.

The new iPhone version is available here.

Zoomingo has $1.3 million in funding from Naya Ventures, Benaroya Capital and several angels.



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13Mar

Licensed To Spin: Turntable.fm Inks Deals With The Big Four

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From the outset, the biggest appeal of social music platform Turntable.fm has been its synchronous listening in public rooms where anyone can become the dee-jay. Of course, turn back the clock six months, and Turntable probably didn’t see Facebook as a competitor. However, at f8 the social network launched Turntable-inspired synchronous listening and chat and went public with some big partnerships with the likes of Spotify and Rdio. At the time, Turntable could only grin and say “thank you,” but now the startup can reply with some big guns of its own, as it announced deals with the “Big Four” record labels — Sony BMG, Universal, EMI, and Warner — at SXSW today.

Launching last summer, Turntable saw quick, early adoption among music fans and tech media, but ever since the hype has dissipated, there have been questions hanging over the social music platform, like, “can it compete?” Without the blessing of the major record labels, many speculated that startup would be toast. But, today, that concern has obviously been put to bed, as the social music platform finally inked contracts with music’s bigs — after nine-months of white-knuckle, teeth-grinding negotiating.

Greg Sandoval at CNET originally reported the rumors that Turntable.fm was nearing a deal, and today Chairman Seth Goldstein confirmed those suspicions. Less than a year old, Goldstein said that Turntable has now reached over one million users — across platforms. Originally a web-only service, Turntable launched an iPhone app in September, which has helped increase the service’s reach dramatically.

Goldstein told former TechCrunch Editor Erick Schonfeld that part of the reason negotiations with record labels were so protracted is that it took so long to work out how it would license music given the startup’s unique music listening configuration. The setup of Turntable’s listening rooms dictate a different experience for those DJing as compared to those who are just passively listening — apparently different licenses apply to both.

While the labels have plenty of clout over the young startup, it has become clear, as Erick points out, the social music platform has the potential to be a significant marketing channel for the Big Four, with both the startup and the record labels partnering up to bring big-name artists to the platform — and to live events.

More on Erick’s interview with Seth here.

We’ll be updating as we learn more.



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08Mar

Social Passport Marries NFC With Social Media For A New Spin On Mobile Deals

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When it comes to daily deals and loyalty programs, local merchants are constantly bombarded with new options. Groupon has leapt ahead in daily deals, and there quite a few players in the loyalty program space, all trying various approaches to mobile, to rewarding influencers, to encouraging social engagement, gamification, and more.

Generally speaking, local merchants, whether they be restaurants or retailers, want to keep it simple: If they choose to offer discounts or deals, they want to be able to set the terms, upsell, encourage repeat visitors, and track the ROI of their campaigns — doing so in a way that results in as little friction as possible for customers.

New York-based Social Passport is taking a different approach to the problem by creating a social loyalty tool that leverages both NFC and QR codes to allow customers to interact with their favorite businesses in realtime and receive discounts, and, in turn, gives businesses access to a wider audience of potential customers through their users’ social media channels.

Launching in October of last year — and shortly thereafter winning the “best startup” award at Web 2.0 in New York City — Social Passport allows businesses to easily post NFC tags or QR codes in their store, which users can then interact with to unlock rewards, deals, and discounts. For example, a customer might enter a store in which a merchant has posted a QR code; the user scans the code with Social Passport, which then displays a range of prompts being offered by the merchant. Those might ask the user to check in to the app on Foursquare, post their location to Facebook, or follow or tweet their reaction on Twitter.

After doing so, the user would unlock a reward pre-established by the business under their own terms, whether that be a 30 percent discount on burritos or a buy one, get one free deal for socks. On the other side, business owners get their own dashboard through Social Passport, through which they can set their deals, and view analytics, like how many scans they performed, how many people they reached on social media spaces, or how many people clicked on a respective message, for example.

And today, Social Passport is launching a feature called “More Friends, More Savings,” which enables businesses to reward their customers proportionally, meaning that they can offer greater savings to those users who have substantially larger social media footprints. For example, a user who has 50 followers on Twitter or 75 friends on Facebook could would receive a 20 percent discount, while someone with 700 on each might receive a 35 percent discount.

The big attraction here for merchants is that they’re able to add that extra layer of security, giving themselves an added layer of protection against customers who might, say, create social media accounts just to check-in (in other words, people who are trying to game the system).

Social Passport has already been deployed by 115 businesses in New York City (the service will be expanding to other cities later this year), with in additional 50 businesses having signed up. With the startup’s new feature in place, users can now simply download the startup’s iPhone or Android app and instantly begin “liking,” following, and checking-in at their favorite businesses, receiving deals tailored to them based on their interaction with the business on social media in accordance with their social footprint. Meanwhile, businesses are able to take advantage of the viral potential of a few positive words from influential users and reward them accordingly.

Even if a user doesn’t have a NFC-enabled device, they can use both QR codes and Reverse QR, the latter of which allows users to display their own and have merchants scan them, with both enabling customers to perform the same social media functions — while scoring a few deals.

Social Passport founder and CEO David Merel says that he thinks merchants are tired of the solutions that simply reward people who are already in the store, and instead want more efficient ways of driving new customers into their stores, while taking advantage of social media influence. Thus, the team has designed a platform that is flexible and provides a big value-add for these businesses, offering businesses their own QR and NFC stickers, complimentary signs to advertise to users in store windows, and its own punchcard feature, which Merel says is similar to that of PunchTab.

The startup has raised $400K in seed financing from private and angel investors, and Merel says that the team plans to begin rolling out its API in the near future.

For more on Social Passport, check them out at home here and in the video below:



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13Feb

Behind New Funding, Matchbook Wants To Turn Bookmarking Into Action With Intent-Based Deals

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Matchbook was founded under the simple belief that mobile technology can make people’s lives easier — not just in the interest of early adopters and tech enthusiasts — but for moms and grandmothers, and the many non-tech-savvy people out there. Once upon a time, if you wanted to remember, say, a restaurant you loved or wanted to try, you went in and grabbed a branded matchbook from that venue. (Those were the days when smoking actually gave people use for those matchbooks.) The rise of mobile devices transferred that behavior into note-taking apps of all varieties. Matchbook then took those mobile notepads and built an app to enhance that experience, allowing users to more easily remember those must-visit places they hear about from friends, blogs, or just in passing by.

Essentially, Matchbook is like Foursquare or Yelp, minus the check-ins, reviews, and social networking — just a simple bookmarking feature for favorite places. While this may sound a bit too pared-down for the taste of tech enthusiasts, you have to remember that there are a lot of people out there who don’t use Foursquare, who aren’t comfortable or used to checking-in at every place they visit, or voraciously social networking while on the go. So Matchbook offers users the ability to organize all of their to-dos by neighborhood on a map layout, search bookmarks for date spots, find the best of those bookmarks, along with top places flagged by other users — to name a few.

The app’s target demographic has been predominantly women, in their late 20s and up, who aren’t particularly interested in social networking inherent to many of today’s apps, or social recommendations, they simply want a more interactive way to bookmark their favorite places.

Since its launch last summer, Matchbook has collected a hefty amount of data on their users’ intent, what places they plan on visiting, and so on, and as it goes, advertising against intent is inherently more effective, so the startup is today taking the next logical step: Serving users deals from the places they actually plan to patronize.

Matchbook’s new intent-based deals product alerts users when a place they have bookmarked is running a deal on sites like Groupon, LivingSocial, and Gilt City, reminding users of their favorite venues, through user-specific offerings at discounted prices. Naturally, if, for example, LivingSocial happens to run a deal for that new restaurant in your neighborhood you’ve been meaning to try, Matchbook will send users a notification allowing them to buy the coupon. The more venues a user bookmarks, the more useful and targeted the service’s deals become.

Matchbook represents a category of apps that eschews certain aspects of the social revolution, using social features only sparingly to create what Matchbook Founder and CEO Jason Schwartz hopes is a more intimate user experience. Most apps focus on deals that are already around you, or trying to create serendipity by serving you deals in realtime as you walk through your local neighborhood. Of course, when people are out and about, the majority of the time, they’ve already decided where they want to go to eat or shop. By keeping track of the places users want to go in the future, Matchbook is taking somewhat of an alternative approach, by focusing solely on the businesses users already plan to patronize, which just sounds like smart business.

Thus, the value proposition here is that Matchbook is collecting valuable data around venues and user intent, and there’s little that is more valuable to advertisers, brands, and businesses than getting a sense of where people plan to shop and eat in the near future.

The app, which is available on the App Store today (and will be coming to Android and other platforms in the future), has also garnered the attention of investors. Corresponding with its new deals feature, Matchbook is also announcing that it has raised $250,000 in seed funding from Quotidian Ventures and from Percolate, Mashape, Nestio, and Foursquare investor (and Co-founder and former COO of the Barbarian Group), Rick Webb.

The New York City-based startup plans to use its new infusion of capital to help fuel its growth, ramp up hiring, and develop apps for other mobile platforms. Though many of Matchbook’s users aren’t interested in the majority of social features, Matchbook still plans to find the best ways to integrate social functionality to enhance the user experience.

But, no doubt that serving users with a simple bookmarking app that lets users make personal notes and add tags to each places entry, along with being able to do so offline, and serve them with relevant deals to places they already want to go, could be a great way to increase the likelihood of users following-through on intent and, in turn, patronizing those local businesses. Even if this doesn’t solve the problem of creating loyal customers, it does help turn intent into action among a much coveted demographic of mainstream female shoppers.

Matchbook’s app is free to use, so to monetize its new deals feature, the startup will be taking a cut of all daily deals purchased through its app. Each daily deal site has its own affiliate program, but the average is about 10 percent going to referrer. To make a significant chunk of change, Matchbook will have to help sell a lot of deals, but with intent in its favor, the startup thinks that it can get more bang for its buck.

To learn more about Matchbook, check out the startup at home here.



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