Retailers shift their ad spending from TV, radio and print ads to digital ads.
Its Freebies section features coupon codes for more than 5,500 brands.
Groupon Inc. is turning its original business—getting shoppers to pay for discounted vouchers—on end by launching a section on its site and app that offers promotional codes and coupons that shoppers can claim for free.
Consumers who click the tab for the section, which Groupon calls “Freebies,” on the daily-deal operator’s site or app can browse offers by store or category, use a search box, or scroll through a grid of featured deals.
Groupon collects a commission when a consumer makes a purchase using a Freebies promotional code, making it an affiliate site for participating retailers. The commission is based on a percentage of the price of the purchased item and is “directionally consistent with the industry,” says a Groupon spokesman.
For now, Freebies is available only in the United States. However, Groupon says it plans to expand into “key international markets” next year. The daily-deal operator declines to share the markets it planned to expand into or a more specific timetable for the plans.
"We want to save customers money everywhere they shop—whether it's their local coffee shop or a large department store," says Rich Williams, senior vice president of global marketing. "Freebies is another reason to always check Groupon first."
Freebies puts Groupon in direct competition with coupon sites such as RetailMeNot.com and is the latest step to diversify its business beyond selling discount vouchers. For example, the daily deal operator on Monday opened up its first distribution center to speed delivery of physical goods sold through its fast-growing Groupon Goods and Reserve divisions.
The daily-deal specialist has also spent much of this year seeking to lessen its reliance on e-mail marketing. Direct e-mail accounted for less than 40% of overall transactions in North America in the third quarter, virtually unchanged from the second quarter but down from about 45% in the first quarter, Groupon says.
In the place of e-mail marketing, Groupon has pushed consumers to download its mobile app, which it recently redesigned. The mobile app, which nearly 60 million consumers worldwide have downloaded, follows customers as they travel, whether to another city or to a different country. When the app detects that a mobile customer’s location has changed, it sends a push notification when she is in range of nearby Groupon deals, such as an offer for a restaurant down the block. Inside the app, local deals are automatically displayed based on the customer’s current location rather than her hometown.
The company said earlier this month that it is also conducting a test that doesn’t require consumers to sign in to view deals on its site, which it hopes will further lessen its reliance on e-mail marketing. Such a change would mean Groupon would “no longer force people to become [e-mail] subscribers, which means anyone can just come to our site, browse a deal and buy it,” said CEO Eric Lefkofsky earlier this month during a conference call with analysts. If the change worked, it could be a “watershed” moment for Groupon, he said.
Groupon is No. 65 in the 2013 Top 500 Guide.