SAN FRANCISCO, Nov. 4, 2011 /PRNewswire/ -- Coinciding with Groupon's IPO making it the largest tech public offering since Google, Beyond, a digital agency, has released data from Yipit which shows that the growth of Groupon Now!, its location-based service, has stalled. Since its launch five months ago, the average weekly growth rate has gone from 37% in June to an average weekly growth rate in September of 6%, with the rate down to 2% in the last week of September.
The actual revenue generated in September from Groupon Now!, originally hailed as Groupon 2.0, was just 0.7 percent of its overall North American revenue.
According to Beyond, which specializes in understanding consumer behaviors online, the data points to a significant challenge with the Groupon Now! model when it comes to winning over consumers.
"Groupon Now! has seen the strongest adoption for spontaneous purchases such as restaurants where the average price per deal is $8 compared to much higher involvement purchases such as medical and dental care. However, with merchants on average making just $171 from Groupon Now! per month versus $22,722 for Groupon and with discounts bigger on Groupon than Groupon Now!, the merchant and consumer incentive isn't there to drive high adoption rates," commented David Hargreaves, CEO Beyond.
For years, people have promoted the holy grail of marketing as the ability to offer relevant deals based on people's location, but even with Groupon's huge sales and distribution infrastructure its geo-targeted product has failed to ignite consumer interest.
"One of Groupon's challenges is that people want to get deals from specific brands they care about and yet Groupon has no way making deals highly personalized. Additionally, brands can use multiple different platforms to offer deals to their most loyal customers," added Hargreaves
About Beyond: Beyond is a digital consultancy helping brands make a positive impact on people by creating engaging experiences people want to share. The root of their approach is the power of good content and insight driven ideas. Armed with insights combined with creativity and technical expertise, Beyond creates highly social experiences through owned, earned and paid media. Based in San Francisco, New York & London, Beyond is an international digital agency owned by the Next Fifteen Communications Group, expanding across 38 offices in 19 markets around the globe. For more information, visit www.bynd.com.