Groupon Inc Opens Offline Stores To Push Sales

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Groupon Inc (NASDAQ:GRPN) is working with its offline retail peers in Australia to open pop-up stores and offer quick shopping to tackle the Christmas crowd and make sure the goods purchased are delivered to consumers before the crucial date of Dec. 24, says a report from the Sydney Morning Herald.

Groupon prepares for Christmas

The online retailer has taken a short-term lease on the former golf range store in Elizabeth Street to enable customers to purchase in store and collect instantly or buy online and decide when it is comfortable for them to pick the items up.

Groupon convinced the store to offer a 70% discount on over 20 products to “click and collect” and is also planning to run the same offer on 30 products in the lead-up to Christmas. Alistair Venn, Groupon Australia chief executive, said the offline stores will give Groupon a physical presence along with offering customers a free “click and collect” service, which is popular across the globe.

Competitor eBay Inc (NASDAQ:EBAY) also took a similar step by launching its first interactive store in the forecourt of Customs House, Sydney.

Analysts confident after record sales

The online retailer recently reported strong holiday sales, after which Tom Forte of Brean Capital turned more bullish on the stock. The company posted record sales in North America on Black Friday and Cyber Monday, and these two days account for the largest sales days in the company’s history. In a research note, Forte said they are satisfied with the strong sales as “we believe its multitude of efforts to improve margin that were outlined at its November 2014 analyst day suggest the strong sales may be coupled with a decent margin.”

The analyst noted that although Groupon posted strong revenue in the past, there was pressure on margins, but this time it is different. The analyst said Groupon followed the strategy of offering more items, thus helping customers find one and more things of their interest. Forte said the strategy is “very encouraging” and allows users to take the deal of their interest from the site. Brean Capital has assigned a Buy rating on the stock with a price target of $10.

On Thursday, Groupon shares closed down 1.2% at $7.40, and year to date, shares are down by around 37%.

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