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Groupon taps Snapchat to add urgency to mobile offers

Groupon, still struggling to redefine itself as more than a daily deals engine, is kicking off a new Snapchat partnership with a time-sensitive first-come, first-serve deal for a concert experience.

Groupon’s stock value tumbled in late-day trading on Tuesday following an earnings report that revealed a bigger loss despite a revenue increase due, in part, to marketing costs. The deal for a trip to attend a Wiz Khalifa concert, priced at $4.20, will go to the first person to follow a Snapchat link to the deal page once it goes live.

“The delivery of deals is becoming more real-time,” said said Esha Shah, manager of mobile strategy and innovation at Fetch. “Users are already looking for deals around them as well as deal related to the things they are interested in – time sensitive deals are the assumed next step in the evolution of daily mobile deals.

“Brands benefit more from this quality rather than users – as they are able to capture a user’s attention and efforts during that range of time if a user is truly interested in making the purchase,” she said.

Mobile messaging
The Snapchat effort is the latest example of how marketers are partnering with Snapchat, which delivers messages that automatically disappear after being read, to bring a sense of excitement to their efforts.

Groupon says Snapchat is a new way for the company to offer exclusive time-sensitive deals and experiences to its customers. The company will continue to use Snapchat to communicate with followers and broadcast exclusive deals going forward.

To be able to access the concert deal, Groupon customers must first follow on Snapchat. Then, sometime between Aug. 4 and 11, Groupon will send out a snap notifying followers when the deal is live.

The first person to follow the link to the deal page will be able to purchase the deal for $4.20. The includes a trip to attend the Wiz Khalifa album release concert at Red Rocks Ampitheatre in Morrison, CO.

Ecommerce transformation
Groupon has been struggling to redefine itself as interest in daily deals wanes, with the company stock value dropping 40 percent this year. Groupon is attempting to recreate itself as more an ecommerce platform along the lines of Amazon as well as by building out its travel offerings.

While mobile is playing a key role in the transformation, the transition is taking longer than expected to make an impact on the business, which is what is causing the stock value slump.

Yesterday, Groupon reported that over half of transactions are coming from mobile, helping to drive a 23 percent increase in revenue during the second quarter of 2014.

At the same time, Snapchat’s fortunes are on the upswing as more marketers embrace the app for its potential to reach users, such as Wet Seal and Taco Bell (see story).

Snapchat reportedly turned down $3 billion buyout offer from Facebook last year and is in talks with China’s Alibaba to fund the company in deal that would value it at $10 billion.

“By leveraging Snapchat Groupon accomplishes a 2 major of things – they add a layer of urgency into their daily deal as users must be ready to receive Groupon’s notification and be fast enough to be the first to make the purchase,” Ms. Shah said. “They also add a layer of time sensitivity making the deal all the more exclusive.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York