The American discount service has admitted defeat in the retail sales of goods and plans to completely abandon this direction by the end of 2020.
According to the company itself, the retail market is too saturated and Groupon has no chance to outperform its competitors. Therefore, no physical goods will be sold through the service, such as toys, clothes, accessories, etc. The company plans to close its U.S. merchandise business by the third quarter of 2020, and will shut down globally by the end of the year.
Now Groupon has officially announced its intention to fully focus all efforts on the sale of impressions. Customers will be able to purchase discounts on various experiences, such as dance lessons, unusual sports, spa visits, etc.
In turn, this direction of sales is promising, because it is becoming more and more popular with buyers around the world. The trend to buy and give impressions is actively conquering more and more new countries. According to experts, this market is valued at over $1 trillion. And Groupon currently occupies less than 1% on it, which is too small for such a large player.
The decision was also facilitated by summing up the financial results of the fourth quarter of 2019. According to them, revenue from the commodity business fell by 32%, which affected the fall of this indicator for the entire company by 23%. This marks an annual increase in net income to $77 million, compared with $46.2 million last year. But this figure still turned out to be lower than previously predicted.