Groupon bought app “intent” company Ditto.me last week. This acquisition signifies a needed shift in the company as it tries to figure out how to remain relevant amid controversy and an outdated, non-mobile business model.
Face it, Groupon should have sold to Google for $6 billion – a decision that will go down as the dumbest one in business history. They are facing an SEC investigation, bad press, low return customers and, well, a backlash from merchants. So why buy Ditto amid all this? What good will Ditto bring to a company that is just a glorified coupon distribution service?
Groupon doesn’t get mobile. They don’t realize the power of this medium and how it can help drive foot traffic to stores in real time. How many times have you been sitting in your local coffee shop, pulled up the “Groupon Now” app and decided to get your tires rotated or have a massage? Serendipity is one thing but unrelated and out of context coupons are of no value. Proximity is only a single axis in the real world: Just because something is close, doesn’t mean I want to do it.
That’s where Ditto.me comes in to play. Ditto is a mobile-first (sound familiar: think Facebook and Instagram) company that understands location is the first piece of a larger, contextualized world. Ditto incorporates a user’s intent – something they are interested in doing – into the equation which is something very different from Groupon’s mobile strategy.
It works like this: Say I’m interested in finding a new baseball glove and I’m not sure where to look. I would log on to Ditto and put it out to my graph asking for their advice. A conversation ensues, recommendations are made and I go and buy a glove. Or say I would like to meet a group of friends for dinner, I would use Ditto to look for recommended locations, pick the type of food and organize the group to meet there from within the app.
I’m sure you can already see how this intent, this layer of context on top of location can play well into a company like Groupon. Pick a type of restaurant, pick your friends and let the bidding begin. Pick a movie you are interested in seeing and make the theatre bid on your business. Real-time, context-based coupons that actually bring value to a business on their terms. This becomes an auction of expiring inventory. While they are at it, why not enable the buy at that very moment. Real time auction, real time commerce.
Who knows if this is the plan for the Ditto team inside of Groupon. This kind of social context and mobile-first thinking will either propel Groupon forward or some enterprising company thinking this problem through will kill them.