Commentary

Groupon's Gnome Is A Day Late And A Dollar Short

I doubt that anyone is a Groupon fan -- not really. No other brand has the front to turn a well-meaning search for a local deal into a lifetime of misery being bombarded by completely unrelated offers in nearby towns and locations that the recipient has no intention of visiting. 

However, the Gnome -- pronounced G-nome -- launch is going to be very interesting. The obvious problem with coupons and vouchers is they're okay online when you can cut and paste a code but offline, they work rather less well. Printing out reams of paper with barcodes and then folding them in a shirt pocket isn't great. Nor is logging into an app and hoping the person behind the till knows how to read and enter the code or scan the barcode.

Eliminating this so people will just be able to give their name or Bluetooth the offer to the till is a great idea, even if it may end up with confusing Bluetooth transmission attempts. Apparently the Gnome device will allow retailers to take card payments too.

Trouble is, the offline and online worlds are converging and the offline has a major advantage. Card-based loyalty schemes have been running for years, and most of the major banks are now in on the act, typically through cash back offers. 
These are being extended, however, right into the heartland of Groupon style offers with discounts at restaurants, tech goods and experience days. It's early days, but one can imagine banks -- or at least the schemes they tap into -- will bring in a lot more personalisation based around a user's spending patterns, which will give retailers the Nirvana of personalised offers placed at an individual level. Rather than produce a voucher for all, a select audience who shop with a rival can be targeted, or those who have bought an item might be offered, say, accessories for a reduced price.

Whatever it is, the offers will be based around spending behaviour and targeted, rather than expecting users to wean out the one or two apt offers per year that arrive in emails bombarding their inbox several times a day. They will also, crucially, be private. They will simply be deducted from a bill or credited to a bank account as the transaction takes place.

The largest online affiliate network, Affiliate Window, has already reacted to this by signing a deal with Birdback to allow online offers to be attached to their debit or credit card so a voucher is automatically applied. Quidco, the country's largest cash back provider, already has more than a million customer accounts linked to their credit or debit cards so cash back offers signed up for online are automatically credited back to the account when the card is used. Both services are a very neat solution to the problem of moving online offers in to brick-and-mortar shops where roughly 90% of purchases are made.

So Groupon is not alone in realising that offers need to move from the Web to the store without a voucher. However, others are there first and are tied into the credit or debit card that shoppers use to make the purchase so there's no need to remember anything and no interruption at the till.

For me, Gnome is a great idea -- and exactly what Groupon should be doing (other than signing a deal with Birdback), but I do wonder if it's come too late. Everybody I have ever known or talked to about Groupon is fed up with the brand, and many of the retailers that use the site are disappointed their discount wasn't made up for by larger basket sizes or subsequent purchases. 

If the banks get their offline act together and move beyond a small handful of deals to actually take Groupon on, I think they will be pleasantly surprised at the outcome. Likewise, the biggest online cash back and discount providers are in the space already, and I very much suspect they will be giving Groupon's Gnome a very good run for its money when it surfaces over the next few months.

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