The discount service will no longer sell staff, only experiences.
Groupon has recognized its defeat in the market of retail sales of goods and plans to abandon this direction by the end of 2020 completely.
According to the company itself, the retail market is too saturated, and Groupon has no chance to outperform its competitors. Therefore, physical products such as toys, clothes, accessories, etc. won't be sold through the service. The company plans to close its product business in the U.S. by the third quarter of 2020, and by the end of the year, this area will be halted on a global scale.
Now Groupon has officially announced its intention to concentrate all its efforts on selling experiences entirely. Buyers will be able to buy discounts on various ideas, such as dancing lessons, unusual sports, visiting a SPA-salon, etc.
In turn, the direction of this sale is promising, because it is becoming more and more popular with customers around the world. The trend to buy and give experiences is actively conquering more and more new countries. According to experts, this market valued over $1 trillion. And Groupon currently occupies less than 1% of it, which is too small a figure for such a significant player.
The decision was also facilitated by summing up the financial results of the fourth quarter of 2019. According to them, revenues from the commodity business fell by 32%, which affected the decline in this indicator for the entire company by 23%. At the same time, there was an annual increase in net income to $77 million, compared to $46.2 million last year. But this figure was still lower than previously predicted.