That includes a distribution center in Hebron, Kentucky, opened in November 2013. It also seems logical in terms of what Groupon has built out already. On top of that, direct revenue (from goods purchased by and shipped by Groupon) increased 109% from 2012 to 2013. (Goods was up 25% from $1.49 billion in 2012 Groupon overall was up 10% from $2.3 billion in sales in 2012.) That means it is one of the company’s fastest-growing divisions at the moment.
The division brought in $1.87 billion in revenue in 2013 on total revenues of $2.6 billion. It makes sense for Groupon to make investments into expanding its Goods service. “We have no plans to expand outside the US at the moment, but this is clearly an obvious next step assuming our customers request it,” Rob Lopez, General Manager, Groupon Basics, tells me. Effectively, since many of the deals are on bulk items, that means that most purchases will be over $25 and qualify for the free shipping option. To get around the hurdle that some people may not want to shop online, Groupon is also offering free delivery service to orders over $24.99, and it’s also giving people 5% of the total purchase back in “Groupon Bucks,” the site’s loyalty-focused virtual currency.
The lack of membership tie-in could have its drawbacks, of course. Unlike these two, though, you don’t need a membership to use Basics. “We’re putting the bulk buying power of Groupon to work for our customers, helping them save on serious quantities of the things they buy and use every day –– all from the convenience of their home,” Aaron Cooper, senior vice president of Groupon Goods, said in a statement. The idea is that both Groupon and its customers are getting a discount by virtue of buying items in bulk, not unlike the business model followed by Costco and Wal-Mart-owned Sam’s Club. The service is kicking off with around 100 items on offer - things like Gillette razor heads, Dove deodorant, Airborne immune supplement and Pantene shampoo - with discounts generally at 20%-30% off retail prices. Starting with household, personal care and health products, the plan is to expand to canned and packaged groceries in the next few months. Today, the company is launching a new business called Groupon Basics - offering discounts on home goods to compete with warehouse-based bulk-buying clubs - that will bring it one step closer to that idea.Īs an expansion of the online e-commerce portal Groupon Goods, Groupon Basics a discounted, bulk shopping service for home goods. Last year, Groupon’s CEO Eric Lefkovsky said that his ambition was to make the e-commerce company’s Goods business more like Costco, not Amazon.
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