Groupon’s Retail Experiment Goes Live in Chicago & San Fran

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Groupon (NASDAQ:GRPN) is testing out the waters of some new territory, and Chicago and San Francisco consumers are the ones reaping the benefits. The Chicago, Illinois-based company has long been known for its appealing deals that it offers to customers through alliances with companies and retailers, but now Groupon is testing out a pilot program that involves helping small retail stores sell off their excess inventory. Re/code’s Jason Del Rey reported on rumors of the pilot test earlier this month, and now it looks like those rumors are proving true. Del Rey reported Friday that Groupon is now experimenting with its program in Chicago, and also in the San Francisco Bay Area, and he still is standing by his explanation. “Under the new business, Groupon customers would order a product from a local store through or through a mobile app and then pick it up at the retail location.”

Faced with continued competition from rivals like LivingSocial, it’s not unexpected that Groupon would try its hand at new ventures, and it refers to its latest one as “Local Pickup deals.” Re/code reports that these deals expire more quickly than regular Groupon offers, but the retail bargains are still expected to be attractive options for both cost-conscious shoppers and small retailers. The inventory that is offered at bargain prices on Groupon is that which the retailer has already struggled to sell at full price, and would have otherwise gone unsold, but its feature on Groupon helps retailers reach the audience they are looking for. 

It is not yet confirmed whether the “Local Pickup deals” experimentation will expand throughout the rest of the U.S., but if successful, many consumers and retailers may be poised to reap the benefits. Groupon spokesperson Paul Taafe told Re/code that the “deals are a pilot that connects our Goods business to our Local business” and that, “They are still under test as we work through what works best for local businesses and customers.”

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