Groupon Now: I’m Bored and Hungry

Posted on March 31, 2011. Filed under: Uncategorized | Tags: , , , , , |

In the March 21 issue of Businessweek I found an interesting article about a new innovation at Groupon, Groupon Now. You may have seen it too. This service is conceptually very simple (probably the reason it will be wildly successful). It uses the geo positioning feature of our smart phones, coupled with the information provided by Groupon’s systems to answer the simple questions of “I’m hungry, where should I eat?” and “I’m bored, what should I do?”. The mobile app then suggests places to eat or things to do by providing a list of Groupon coupons that can be used at that moment. Not only does this provide Groupon with an entirely new revenue stream, and provide the vendors with a new way to fill tables or bowling alleys at those elusive non-peak times, it takes the Groupon model to a new dimension, the instantly responsive dimension we like to highlight in the blog.

The service is scheduled to launch in April, so it’s not yet proven. But from the description of the service, it has all the hallmarks of a very successful app. Here’s how it is supposed to work:

You are standing on the street corner deciding where to eat. You tap the “I’m hungry” button. Up comes a list of restaurants nearby and the deals they are offering at that moment. Each eatery has offered a coupon good for food for a specific day and time when their tables would otherwise be empty. You want to eat, and they want you to eat there right now. It’s brilliant. It’s simple. and it’s instantly responsive. Restaurants who do fill up can then remove their coupon. Bowling alleys who fill their lanes can remove their coupon. And consumers like you and me can get the value of a Groupon without purchasing it days or weeks prior and then forgetting to use it. You can purchase it in the moment and use it then.

The characteristics that will make it successful are:

1.  it’s simple to use.  Apparently Groupon staff wrestled with a number of options but settled on two very simple buttons, I’m hungry and I’m bored, for the interface. It makes this easy to use, intuitively obvious how to use it, and functional.

2. it’s useful, instantaneous and relevant.  The vision for this app is to use it when we are looking for a place to eat or something to do.  It’s designed to fill a need we have at the moment we have that need.  It provides options, so it’s not autocratically telling us what to do, but the options are limited to what’s available, so it’s manageable from Groupon’s perspective (it’s not all the restaurants in the area, just the groupon coupon-providing ones).  This follows the principles we’ve discussed in an earlier blog about Zero Time Organizations.

3. it doesn’t depend on the masses to be useful.  While I like the idea of having a critical mass of interest before a deal is on, I like the idea even better that a deal is on just because it’s offered and I want to do it.  There’s no stress wondering if a deal is going to make it, and no lag time between when I find it and when I get it.  The transaction happens without another party’s involvement.  Many apps, trying to build on the benefits of social, end up being dependent on the masses to make them a trendy app or not.  Unlike it’s parent app, Groupon Now will work just because I want to buy and the vendor wants to sell.

I can see applications for this type of instant mobile app in many other industries. A retail store can offer spot discount coupons for overstocked items. My daughter would certainly hound me to take her to our local Forever21 if she had this app with a coupon for a significant discount on jean shorts or trendy tank tops. My local grocery store could use this type of coupon to sell all the roasted chickens they made before the end of the day (or right before dinner time) when we are all there trying to figure out what to serve the family tonight. The gas station could tell me about a discount car wash when their system was open. Granted, at the moment, these are all consumer-oriented businesses, but give the industry a minute or two and I’m sure there will be apps for b-to-b, non-profits, educational institutions and others, too.

For this to work, Groupon is asking us to form a new habit…one of checking Groupon whenever I am about to go to a restaurant or recreational spot. Right now I ask my husband where we should eat, or go to the movies (and if you are like us, it’s a constant source of tension…I think I’m being inclusive, he things I’m being indecisive). But a list of instantly usable Groupons for places nearby would definitely factor into our decision. And that is why it will work. The vendors win, the customers win, and Groupon wins. The only group to lose are the vendors who are userped by their competitors who get my business in the moment, because they were not on the list of choices when I checked Groupon Now. My biggest problem with Groupon is that I purchase coupons, then either forget to use them, or when I go to use them the resataurant is so crowded that we can’t get in.

I am excited about this new app and I can’t wait for them to offer it in Austin. Come on guys…I’m hungry and after writing this blog, I’ll be bored.

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