Groupons in Plastic Instead of Paper? Not so Fishy

Groupons in Plastic Instead of Paper? Not so Fishy
Tags: Customer Experience, Loyalty Programs, Marketing, Retail - General, Supermarkets & Grocery Stores
June 9, 2011

Groupon has ventured deeper into loyalty marketing – and away from paper coupons – with a Boston-area test program that’s offering $40 in shellfish for just $24 clams.

In the test, with Springfield, Mass.-based supermarket chain Big Y, the seafood transactions are processed through the supermarket chain’s loyalty cards, rather than through the traditional Groupon coupon. Users just make their purchase at the Groupon site, enter their Big Y Express Savings Club account number, and the deal is loaded onto their account.

Other supermarket chains and possibly packaged-goods makers are expected to join the program, according to a story in Advertising Age.

This is not Groupon’s first foray into loyalty marketing, which indicates a multi-pronged effort to fully understand and leverage the loyalty plan structure, in which consumers earn rewards and recognition for the amount of money they spend with specific consumers. In February, we blogged about Groupon’s partnership with Cartera Commerce, a Lexington, Mass., company that manages loyalty rewards programs for credit card companies, retailers and others. And in 2010, Groupon began testing its own loyalty plan that involved randomly invited members.

For a coupon company that built its business on deals for discretionary purchases, such as spa visits and restaurant meals, Groupon’s entry into practical venues – places where consumers will visit at least once a week – could be the strategy to push it into the black. The Chicago-based dealmaker has lost more than $500 million since it was founded in 2008, including a loss of $390 million in 2010.

But on June 3, the day after Groupon announced its $750 million initial public offering, Chairman Eric Lefkofsky said the money-losing company will be “wildly profitable.” Fishy statement? Maybe Groupon has more surprises up its sleeve.