Groupon and the “let’s spin it out” app trend

Groupon announced yesterday that it was launching a new app, Getaways, which will focus on travel offers. This follows Facebook’s spin off of its messaging functionality into a separate app that Zuckerberg discussed last week. Folks, it seems like we have ourselves a trend!

Groupon gave an interesting explanation as to why it decided to split out travel into its own, dedicated app. First, they noted that the most searched term on Groupon, site and app, was “hotel.” That was their first clue. Second, travel is an important chunk of Groupon’s revenue. Simon Goodall, VP/GM, Groupon Getaways, said that “between Q3 2013 and Q3 2014, Groupon had over $908 million in gross travel billings, just under 13% of all of Groupon’s total gross billings in that period.” It is also a growing segment, with those billings representing a “growth of 69% between Q3 2014 and Q3 2014.”

Groupon's Getaway app: Browsing by theme

Groupon’s Getaway app:
Browsing by theme

Groupon also added travel focused features on Getaway designed to help users find a travel deal faster. The new features include browsing by themes, which are, well, themed packages such as “beach getaways,” “outdoor adventures” and “ski destinations” to name a few. It also created a travel-oriented search tool, including map-based searches. I liked that my opening screen included a local deal for tonight, a night at a fancy San Francisco hotel where I wouldn’t usually go. I like the spontaneity of it for the user and the attempt to fill up unused space for the hotels.

Groupon Getaways app:  Near me tonight, spontaneous SF deals

Groupon’s Getaways app:
Near me tonight, spontaneous SF deals

Also, going back to the Facebook announcement, Zuckerberg said that a major motivator for spinning out its messaging app was what competitors were doing. “We saw that the top messaging apps people were using were their own app… Having to go into an app and take a bunch of steps to get to messaging is a lot of friction.” I’m sure that this must have been part of Groupon’s motivation to create the Getaways app. As Techcrunch noted: “Getaways squarely puts Groupon up against the likes of Hotel Tonight, Kayak, TripIt and others that help smartphone users plan trips.”

Interestingly enough, though, it seems that Groupon has adopted a different adoption strategy than Facebook. Where Facebook decided to remove messaging from its main app and “force” the download of Messenger if the user wanted to continue to use the messaging functionality, Groupon is taking a milder approach. It will continue to offer travel deals in its main app for now but it will also offer a discount for deals booked through the new app. They are aware that users might be hesitant to download another app but instead of using a stick, they are offering a carrot. Well, Facebook is probably one of the only companies that can force such a download so I agree with Groupon’s adoption strategy here.

Finally, a few weeks ago I wrote about the amazing stat (from Google) that “one in three shoppers will use their phone to find the information they need rather than ask an employee” and how many mobile apps by retailers focused more on buying through the app than finding in-store information. Could it be that these retailers need to provide two separate apps, one focused on the in-store experience with item locating, detailed information and price scanning features and a separate app focused only on online shopping? Just a thought as we head into the holiday season. Regardless of the retailers, it will be interesting to see what other apps follow this trend in the future.

 

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