Tweet
October 14, 2010, 12:03 AM EDT
By Joseph Galante
Oct. 14 (Bloomberg) -- Groupon.com Inc., the daily deal website with 20 million subscribers, is talking to EBay Inc.?s PayPal unit to expand the ways users can make purchases and combat fraud, said two people familiar with the matter.
Working with PayPal, which offers secure ways to buy and sell over computers and mobile devices, would help Groupon and merchants better track how consumers use their coupons, said the people, who declined to be identified because the discussions are private.
Groupon, started in 2008, has expanded to more than 230 cities in 29 countries. The Chicago-based company is trying to help merchants manage the flood of customers it sends their way and deter bogus redemptions by people who print out multiple coupons. Groupon leads a pack of companies offering daily deals from local businesses. It was valued at $1.3 billion in April after a $135 million investment from Digital Sky Technologies.
?We?re keenly interested in ways to make redemptions easier for both customers and merchants,? Groupon Chief Executive Officer Andrew Mason said in an interview. ?What we?re trying to do is give them something that?s super-fast and easy to use.?
Groupon is also releasing a mobile-phone application in the coming weeks to help retailers track the thousands of customers that purchase deals, known as groupons, Vice President Mihir Shah said in an interview.
Most merchants print out lists of people who buy the daily deals and cross off serial numbers as consumers redeem their groupons, according to Groupon. That?s time-consuming for businesses and opens them up to misuse.
Time-Consuming Process
?It?s fairly cumbersome on the store?s part to keep track of the serial numbers,? said Rick Karp, president of Cole Hardware. The San Francisco-based retailer sold more than 3,800 groupons in July offering a 50 percent discount on products.
Groupon sends out a daily e-mail to subscribers about a nearby merchant. When enough people sign up for an offer, the deal activates, thereby encouraging consumers to tell others to sign up for it.
While Groupon sends the stores a list of serial numbers for every deal sold, many mom-and-pop shops don?t have a centralized system and bar-code scanning technology to track the customers, who can often number in the thousands. The company keeps half of the revenue generated by the deals.
The mobile app, which runs on Apple Inc.?s iPhone and handsets that use Google Inc.?s Android software, lets merchants scan serial numbers on Groupon customer receipts, Shah said. Groupon began testing the app in some stores last week, he said.
?Left in the Cold?
The company?s rapid growth has spurred others to start rival coupon sites, including LivingSocial and Groop Swoop. Groupon has raised a total of $170 million from investors.
Merchants are trying to figure out how best to use Groupon, with some getting overwhelmed with the flood of new business. To help, Groupon introduced consulting programs and online seminars for the retailers this year.
?When you as a merchant try to grow your revenue by opening yourself up to new methods of electronic commerce -- Groupon or whatever -- you expose yourself to greater fraud risk,? said James Van Dyke, president of Javelin Strategy & Research in Pleasanton, California. ?Is it dangerous? Yes. It?s also dangerous not to be involved. The merchants who don?t get involved in this don?t grow and get left in the cold.?
--Editors: Lisa Wolfson, Tom Giles
To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.
Powered by WizardRSS | aioWebmaster.com
Oct. 14 (Bloomberg) -- Groupon.com Inc., the daily deal website with 20 million subscribers, is talking to EBay Inc.?s PayPal unit to expand the ways users can make purchases and combat fraud, said two people familiar with the matter.
Working with PayPal, which offers secure ways to buy and sell over computers and mobile devices, would help Groupon and merchants better track how consumers use their coupons, said the people, who declined to be identified because the discussions are private.
Groupon, started in 2008, has expanded to more than 230 cities in 29 countries. The Chicago-based company is trying to help merchants manage the flood of customers it sends their way and deter bogus redemptions by people who print out multiple coupons. Groupon leads a pack of companies offering daily deals from local businesses. It was valued at $1.3 billion in April after a $135 million investment from Digital Sky Technologies.
?We?re keenly interested in ways to make redemptions easier for both customers and merchants,? Groupon Chief Executive Officer Andrew Mason said in an interview. ?What we?re trying to do is give them something that?s super-fast and easy to use.?
Groupon is also releasing a mobile-phone application in the coming weeks to help retailers track the thousands of customers that purchase deals, known as groupons, Vice President Mihir Shah said in an interview.
Most merchants print out lists of people who buy the daily deals and cross off serial numbers as consumers redeem their groupons, according to Groupon. That?s time-consuming for businesses and opens them up to misuse.
Time-Consuming Process
?It?s fairly cumbersome on the store?s part to keep track of the serial numbers,? said Rick Karp, president of Cole Hardware. The San Francisco-based retailer sold more than 3,800 groupons in July offering a 50 percent discount on products.
Groupon sends out a daily e-mail to subscribers about a nearby merchant. When enough people sign up for an offer, the deal activates, thereby encouraging consumers to tell others to sign up for it.
While Groupon sends the stores a list of serial numbers for every deal sold, many mom-and-pop shops don?t have a centralized system and bar-code scanning technology to track the customers, who can often number in the thousands. The company keeps half of the revenue generated by the deals.
The mobile app, which runs on Apple Inc.?s iPhone and handsets that use Google Inc.?s Android software, lets merchants scan serial numbers on Groupon customer receipts, Shah said. Groupon began testing the app in some stores last week, he said.
?Left in the Cold?
The company?s rapid growth has spurred others to start rival coupon sites, including LivingSocial and Groop Swoop. Groupon has raised a total of $170 million from investors.
Merchants are trying to figure out how best to use Groupon, with some getting overwhelmed with the flood of new business. To help, Groupon introduced consulting programs and online seminars for the retailers this year.
?When you as a merchant try to grow your revenue by opening yourself up to new methods of electronic commerce -- Groupon or whatever -- you expose yourself to greater fraud risk,? said James Van Dyke, president of Javelin Strategy & Research in Pleasanton, California. ?Is it dangerous? Yes. It?s also dangerous not to be involved. The merchants who don?t get involved in this don?t grow and get left in the cold.?
--Editors: Lisa Wolfson, Tom Giles
To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.
Powered by WizardRSS | aioWebmaster.com