Groupon tests an online marketplace
April 1, 2015 01:01 PM
Groupon Inc., the daily-deal veteran that continues to rely more on sales of physical goods instead of discount vouchers, has started testing an online marketplace.
The marketplace is called Groupon Stores and it’s the latest e-commerce endeavor from the company that holds the No. 44 spot in the Internet Retailer 2014 Top 500 Guide. Groupon Stores enables brands and retailers to establish a Groupon storefront at Groupon.com/stores. The program, which a Groupon spokesman says remains in “private beta,” requires that products sold on the marketplace be at least 5% cheaper than elsewhere online. Groupon will take a 15% cut of marketplace sales.
Most Groupon Goods orders are fulfilled by Groupon. The orders made via Groupon Stores, by contrast, will be fulfilled by the merchants selling the products, which means customers will deal with those merchants directly about issues related to orders.
The launch of Stores follows the ongoing growth of Groupon Goods, where the company sells physical goods. The majority of Groupon Inc.’s fourth-quarter revenue, nearly 63%, stemmed from sales of physical goods. In 2014, Groupon Goods revenue hit $1.781 billion, up 56.6% from $1.137 billion in the previous year.
“It's too early to discuss specifics at this point,” the spokesman says. “However, we've seen a very enthusiastic reaction from the merchants that we’ve invited to participate as we're giving smaller Goods merchants massive reach through our marketplace.”
Among the merchants selling on Groupon Stores this afternoon were Beston Shoes, Fashion Club USA and CRG Sports. “This is a huge, untapped opportunity for us to turn the Groupon marketplace into even more of an online and mobile shopping destination by increasing available inventory and bringing the power of our platform to even more merchants,” the spokesman says.
The Stores test comes as Groupon Goods has positioned itself as one of the largest U.S. online marketplaces, behind the likes of those operated by Amazon.com Inc. (No. 1 in the Top 500), eBay Inc. and Wal-Mart Stores Inc. (No. 4), says Scot Wingo, CEO of ChannelAdvisor Corp., which helps retailers sell via web marketplaces. “Now with Stores they are taking a really big step toward being more of a marketplace than a daily deal platform,” he says. “We're excited to watch this and while we don't support this yet, we have some customers testing the waters. We look forward to what they report back to us.”
The launch of Stores also points to another trend, he adds. “From a macro-sense, we are seeing an explosion of new marketplaces of every shape and size,” Wingo says. “We call this trend ‘Marketplaces Eating the E-commerce World.’ What I like about Groupon's strategy is they are very true to their customer base—its customers are value-oriented and Groupon is offering them the best prices on items that are 5%+ lower than anywhere else on the Internet.”