May 11, 2011, 11:55 AM

Groupon offers shoppers nearby deals

Groupon Now offers consumers limited-time deals for businesses based on their present locations.

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Groupon has launched a pilot program called Groupon Now that offers deals to consumers based on their present locations. Consumers can access Groupon Now from iPhone or Android apps, Groupon’s mobile site, or by entering their ZIP codes on Groupon.com. For now, Groupon is offering the service only in Chicago, where it’s based.

Groupon Now, first announced in March, maps limited-quantity, time-specific deals in the consumer’s vicinity. Unlike Groupon’s usual daily deals that are redeemable for up to a year after purchase, Groupon Now vouchers are valid for anywhere from a few hours to a full day.

After a consumer taps the Buy button to buy a voucher online, Groupon sends the user a bar code that the business then scans to redeem the deal. A timer on the deal description then shows the consumer how long he has to redeem the offer. After a deal expires the consumer no longer can receive the additional discount. However, he can use the voucher at the business for the purchase price of the coupon.

Groupon is using a self-service model to allow merchants to create Groupon Now deals. In setting up the promotion, a business can schedule a one-time or repeat deal, while also specifying when it would like to offer the deal, how many vouchers it wants to sell, and what the promotion will offer.

Groupon hopes Groupon Now will enable merchants to attract traffic during slow times. For instance, if a restaurant in Chicago’s Loop business district knows that its walk-in traffic dips on Friday afternoons in the summer, it can set up a deal for 30% off from 2 p.m. until 5 p.m. on Fridays.

The offering mirrors Instant Deals, a pilot tested by Groupon rival LivingSocial in Washington, D.C. Instant Deals, which shoppers can access from LivingSocial’s mobile app, allows users to search for deals within a half-mile radius of their current locations. Like the new Groupon offering, those deals are live for a short period of time.

The launch of Groupon Now comes less than a month after Groupon acquired Pelago, creator of location-based check-in service Whrrl.

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