The rest of the goals are less worrisome but still aren't comforting. And worse, its customers realize this and don't trust Groupon. The second goal isn't much better: "Becoming a better partner to our merchant partners by building merchant trust and a better understanding of merchant economics." This suggests the company lacks an understanding of its direct customers, the merchants that use its service. The first goal presented was "Determining the most important role that Groupon needs to play for merchant partners." If the company doesn't know this by now, what has it been doing for the last decade? But when the company laid out its 2022 goals in its fourth-quarter earnings release, there seemed to be something amiss. Given the company's history, you would expect it would have a good handle on selling coupons on behalf of local stores and restaurants. That said, there are some notable positives hidden in the numbers, including three consecutive quarters of active local customer growth in its core North American market and the not-so-subtle fact that Groupon produced positive free cash flow in the fourth quarter of 2021.īut there's still a reason to worry here. The transition has muddied the company's financials, because its revenues and costs are both materially lower now that it isn't selling products it has purchased. Groupon has been shifting away from this model over the past year or so and going back to its roots of selling coupons or promotions for local restaurants and other merchants. It's a much more expensive proposition, and it didn't work out as well as hoped. That's a vastly different business model which requires buying, storing, and delivering products. But then, the company shifted toward direct selling, believing it could take its online database of users and convince them to buy physical goods. Using coupons, the company helps small stores connect with customers they might not otherwise reach, because they lack their own online direct marketing platform. From a business perspective, it would seem like Groupon fills an important niche.
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