Groupon Inc Testing Groupon Stores To Be An Online Retailer

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Groupon started as a virtual coupon shop offering deals, but management aims to become more of an online retailer. The company has come up with a new concept, in the testing phase currently, called Groupon Stores, which allows brands to create a Groupon storefront to sell their products, says a report from Re/code.

Groupon stores still in testing phase

Re/code informs readers that the company has made it very clear to all the businesses willing to be a part of Groupon Stores that they could sell their goods and/or services through the site only if they sell it at a price at least 5% lower than the price anywhere else on the web.

“This is a huge, untapped opportunity for us to turn the Groupon marketplace into even more of an online and mobile shopping destination by increasing our inventory and bringing the power of our platform to even more merchants,” the company’s PR chief Bill Roberts said in an email to Re/code.

Groupon will take a 15% cut from the sales made by the businesses using its platform, states the report. The right discounting and commission structure is still being tested by Groupon, said Roberts, who also confirmed the initiative.

Growing Goods business

Groupon has grown at an impressive pace in recent years, with much of the growth coming from the company’s Goods business. Groupon unveiled its Goods business in 2011, and the next year, the segment accounted for 33% of the company’s total revenue. Last year it contributed 56% of Groupon’s total revenue. In 2014, Goods revenue came in at $1.8 billion, which was an increase of 55% from 2013.

Groupon Stores is surely a part of CEO Eric Lefkofsky’s long-term plan to turn Groupon from a deals company to an online shopping site. However, such a transformation won’t be easy considering competitors such as Amazon and eBay. But Groupon can benefit from the overall growth of the e-commerce market and the lack of popularity of apps and the online stores of traditional brick-and-mortar discount stores, says the report. Currently, the iPhone app for Groupon ranks sixth in Apple’s App Store.

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