Finally the holiday season is here and
Groupon Inc. (
is providing attractive deals to its subscribers. These include
membership to Griffith Observatory and craft beer and pub food at
Michigan based Frankenmuth Brewery.
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Groupon and Friends of the Observatory are offering a one-year
membership deal for $49.00. In Frankenmuth Brewery, customers
buying the deal will get a 24-pack case of Twisted Helles "craft
in a can," along with pasta, pizza, burgers and traditional
Apart from remaining open on the Thanksgiving Day and launching
the Holiday Gift Shop, Groupon is also offering $100.0 million in
Groupon Credits (also known as Groupon Bucks) to woo holiday
Subscribers who sign up on Black Friday will receive up to $500.0
in credit and are required to spend the full amount on a single
purchase. Groupon's selective subscribers will receive $5000,
which they have to spend by the end of the year.
Besides Groupon's newly designed website, the Holiday Gift Shop
can also be accessed through
In order to boost customer base, Groupon recently launched
freebies that include digital coupons, promotion codes, sales,
giveaways and samples, from more than 5,500 brands in the United
States. The company plans to expand the offering to some key
international markets in 2014.
The new category reflects Groupon's strategy of diversifying its
business besides the core daily deals segment. However, the
coupons will take some time to contribute meaningfully towards
the top-line growth. This is due to the fact that unlike
daily-deals (revenue earned upfront), Groupon will earn revenues
from coupons only if customers redeem them and purchase goods
from the retailer.
Although the online discount coupon market is still in a nascent
stage, we believe that Groupon has significant growth opportunity
due to its growing subscriber base and mobile investments.
In the recently concluded third quarter, Groupon reported that
50.0% of the transactions in North America were through mobile
devices. Moreover, more than 9.0 million people downloaded
Groupon's mobile apps during the quarter. Approximately 40.0% of
global transactions were done through mobile devices in
Although mobile presents ample growth opportunity, increasing
competition from more established players such as
remains a major concern. Moreover, a volatile macro economic
environment and continued investments to expand its merchant base
are expected to impact near-term results.
Currently, Groupon carries a Zacks Rank #3 (Hold).