From The Ground Up

Fwd: Engineering, startups and life

My Bank Is Offering GroupOn-Like Deals

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Groupon clones abound. I used to see deals in my inbox from LivingSocial (which by the way I hav redeemed thrice, while having never even purchased a Groupon yet — the LivingSocial deals have just been better) and Groupon. Now added to the list are Thrillist, GiltGroupe, and The New York Times.

The most interesting yet I received two days ago… from Citibank, called Citibank Specials.

This is interesting to me for a few reasons:

1. This is gonna be huge — Citibank is a massive organization with 200 million customers in over 100 countries. A company this size and risk-averse entering the daily/flash deals market adds a lot of weight to this burgeoning business model.
2. This is personal — Your bank knows more about you than anyone else in the world. They know how often you spend money, what you spend your money on, how much you spend, where you spend, your approximate worth, your address, your phone number, your Social Security Number, your credit history, etc. It will be very interesting to know if/how this data is being used to better target the deals. Do consumers mind that banking institutions are reading their purchasing history to target deals?

A Kleiner, Perkins, Caufield & Byers backed startup Offermatic is a Mint-Groupon hybrid, already doing what Citibank has started. In a manner very similar to Mint, Offermatic  securely links your account to one of your credit cards. The service then delivers deals personalized to you based on your purchasing history.

Will consumers trust a known entity, one they have built trust with over time? Or will consumers prefer that banks remain just that (banks) and look to others to provide these types of added-value services?

Groupon’s foreboding S1 filing this week will do little to stop other’s form jumping into this already crowded market. The difference is that organizations like NYT and Citibank have little skin in the game.

*

Groupon’s shift to Groupon Now, a self-serve model for small local businesses to basically advertise their inventory, signals their acknowledgement that the deals as they are currently executed will not prove financially viable. By emphasizing the mobile e-commerce experience for both merchants and consumers, Groupon will be able to expand it’s reach without as many foot soldiers and develop a technology stack that allows merchants to target consumers in real time. Groupon’s new strategy may prove to effectively distance itself from other larger players just entering the market.

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Written by Girish Rao

June 4, 2011 at 00:16

Posted in Uncategorized

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