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Is Groupon’s Runaway Starbucks Deal a Hail Mary or its Second Coming?

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Is Groupon’s Runaway Starbucks Deal a Hail Mary?

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I don’t think anyone’s been able to say this in quite a while, but Groupon’s shareholders have to be pretty dang happy right now. The daily deals company — now being run sans Andrew Mason — has hoisted up the flag Friday on a $5 for a $10 Starbucks gift card, and it has sold more than 100,000 — which means the company has made, at least $250,000 in a single morning. Any day you can say that isn’t exactly a bad day.

But I feel like this can be interpreted quite a few ways. Is this business as usual? Is this an indication of where Groupon would like to go? If the answer is yes to either of these, well, why did Mason have to go? Because, if memory serves, Groupon has done runaway successful mainstream deals, too: Remember in 2010 when Groupon had a national deal with Gap offering a $50 gift card for $25? By 10 a.m. that day, 4,000 were sold, and by the end of the deal, 700,000 were sold in all, netting $17.5 million in gross revenue. It was so popular that it crashed Groupon’s site due to all the Gap-crazed consumers wanting to save five Lincolns.

It’s unlikely this Starbucks deal will right Groupon’s ship, but what it’s doing is getting people talking. It would be unfair of me to outright dismiss it as no big deal (although $5 off is arguably marginal), but I’m still not convinced Groupon has figured out its all-important new direction. This isn’t something they could have done without Mason, although a big national deal with a major retailer is something Groupon hasn’t done in a good long while. Near the end of Mason’s run, there was a lot of talk of how lackluster the deals had gotten — which might have been a side effect of Mason jetting around the world and keeping his fingers in all the international pies Castle Groupon started baking. You can’t maintain quality control when you’re spreading yourself too thin.

But you can say this much: Since Mason’s departure, Groupon’s stock has been very slowly recovering (it’s at $5.71 as of press time) and, if nothing else, this Starbucks deal will make people wake up to the brand and start paying attention again.

David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City and an adjunct professor in DePaul’s College of Computing and Digital Media. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. His first career aspirations were to be a game-show host.

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