Groupon has long said it wants to be known as more than a deals company. Now it’s showing how.
Groupon to Replace Nearly All of Its Merchants’ Cash Registers With iPads
The new initiative should pit the deals company more squarely against Square.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
Today, the company is introducing an iPad-based checkout system that it expects tens of thousands of businesses that run a Groupon promotion to use.
The system includes, among other things, software that lets businesses track cash and credit and debit card transactions, an iPad to replace a cash register and a tool that will allow a shop’s customers to redeem a Groupon voucher by simply telling a cashier their name at checkout. Customers who have downloaded Groupon’s app and have Bluetooth turned on on their phone will have their discount recognized automatically upon entering a specific store.
The new product, dubbed Gnome (pronounced GEE-nome), also includes payment processing (1.8 percent plus 15 cents a transaction for MasterCard and Visa purchases), integration with popular small business accounting software programs and the ability for businesses to build and automatically update a database with names and contact information for their customers.
Groupon will charge $10 a month for the Gnome iPad system. And just about every new and existing business — tens of thousands in total — that offers a deal through Groupon will be expected to start using Gnome. (Businesses that run promotions through Groupon’s new self-service signup system are exempt for now.)
“Gnome will become a standard part of the experience of running a Groupon for both merchants and consumers, and we’ll handle any exceptions on a case-by-case basis,” spokesman Nick Halliwell said in an email.
Groupon already offers point-of-sale software and payments processing technology separately. But the packaging of those products along with the iPad, smoother coupon redemption and basic customer management tools into what is essentially a mandatory offering for tens of thousands of businesses should bring Groupon into closer competition with Square and other checkout software companies for small businesses.
It remains unclear whether the system will be attractive enough on its own to lure non-Groupon businesses into the Groupon fold. But at a minimum, it is aimed at making current Groupon merchants feel like they are getting more value from Groupon than they have in the past. The hope is that those businesses will decide to run promotions through Groupon more regularly, though it’s not clear how Groupon will react if a business using Gnome decides to take a long hiatus from running a deal.
Still, it’s interesting to observe how Groupon and Square arrived in similar places while beginning the journey from opposite ends.
Groupon built its business by convincing business owners that marketing steep discounts would bring new customers in. Now it’s trying to empower business owners in other ways that aren’t directly related to marketing their business.
Meanwhile, Square made a name for itself early on with its payments service, and has since been attempting to develop a marketing engine to drive new customers into its merchant stores — first with Square Wallet and now with Square Order.
Just outfitting all these businesses with an iPad and new software doesn’t guarantee the initiative’s success, especially since, at $10 a month, the service isn’t supposed to be a big money maker on its own for Groupon. But the breadth of the rollout is a sign that Groupon is committed to figuring out how to cultivate more meaningful relationships with the businesses that advertise on its platform. If it finds success, Groupon may be able to shed the “daily deal” label for good.
This article originally appeared on Recode.net.
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