Retailers shift their ad spending from TV, radio and print ads to digital ads.
The warehouse will help the merchant speed deliveries of physical goods.
Groupon Inc. this week opened its first fulfillment center to speed delivery of physical goods sold through its Groupon Goods and Reserve divisions. Groupon located the warehouse in Hebron, KY, near the Cincinnati /Northern Kentucky International Airport.
“Opening Groupon’s first warehouse will help us better serve our customers,” says Groupon CEO Eric Lefkofsky.
Launched in 2011, Groupon Goods represents a bright spot for the daily-deal operator. Groupon’s physical goods sales soared 2086.1% last year to $454.7 million, up from $20.8 million in 2011, making it the fastest-growing retailer in the 2013 Top 500 Guide. And sales have continued to increase. For the first three quarters of 2013, Groupon has sold $552.2 million worth of physical goods, a 140.5% increase from $229.6 million in the same period in 2012.
The average ticket for Groupon’s physical goods sales in 2012 was $50, according to Internet Retailer estimates available on Top500Guide.com. However, that may increase this year because the company, best known for its daily-deal voucher offers, recently began selling more upscale items, such as $2,499 vintage Chanel handbags, via its Groupon Reserve brand.
The move to sell more premium products is part of Groupon’s long-term plans, Lefkofsky said in July. "Groupon Reserve is an important step in our journey to become the leading marketplace for online deals, where consumers can come to Groupon and discover great businesses at unbeatable prices,” he said “As Groupon has evolved, we've seen growing demand from our customers for upscale offers.”
Groupon is No. 65 in the 2013 Top 500 Guide.