But losses mount for the home furnishings e-retailer that went public in October.
Consumers can use Groupon Basics to buy warehouse-size packages of household staples like razors and hand cream.
Groupon Inc. wants to be the place shoppers turn to for bulk goods.
The retailer best known for selling discount vouchers launched today a Costco Wholesale Corp.-like bulk-shopping service called Groupon Basics.
The service will compete with Costco, Wal-Mart Stores Inc.’s Sam Club, as well as Amazon.com Inc., which sells a wide array of products in warehouse-size packages.
Groupon says Basics distinguishes itself from Costco and Sam’s Club because it does not require a paid membership. And it has a lower free shipping threshold—items ship free when shoppers spend at least $25—than Amazon, which offers free shipping when shoppers spend at least $35. Amazon Prime members, who pay an annual fee of $99, get free shipping on a wider array of items. Amazon also recently launched Prime Pantry, a grocery-shopping digital storefront that allows Prime members to virtually fill a 4-cubic-foot box with up to 45 pounds of non-bulk items from its pantry section. That box is then delivered—as empty or full as the customer desires—for a $5.99 shipping fee, plus the cost of the items in the box.
Groupon Basics sells far fewer products; at launch Groupon Basics has about 100 household, personal care and health and wellness items for sale. For example, it sells a 12-pack of Axe deodorant for $46.49; Unilever sells the same item on Amazon’s marketplace for $55.80 plus $3.90 for shipping. A Groupon spokesman says the retailer plans to build out its inventory, as well as add new categories such as canned and packaged groceries.
Groupon Basics is Groupon’s latest effort to diversify its business. That evolution has largely been successful; the majority of Groupon’s business in the fourth quarter stemmed from shoppers buying physical goods via the retailer’s Groupon Goods division rather than the discount vouchers Groupon built its business on.
“We’re putting the bulk-buying power of Groupon to work for our customers, helping them save on serious quantities of the things they buy and use every day––all from the convenience of their home,” says Aaron Cooper, senior vice president of Groupon Goods. “By adding this service to our marketplace, we’re providing shoppers with great value and yet another reason to always check Groupon first.”
Groupon Goods is No. 44 in the Internet Retailer 2014 Top 500 Guide.