Groupon trips up in Europe as its tech struggles to catch up with the US
The daily deals company hasn't rolled out the IT it uses in the US to Europe and, with six different technology platforms deployed around the world, there's integration plans afoot. But don't hold your breath for change any time soon
Groupon has revealed its European business is having difficulties — and the lag in rolling out new tech to the continent looks not to be helping.
The daily deals company, which published its second-quarter results on Monday, has hit heavy weather in its European markets, with both market penetration and satisfaction with the merchants Groupon uses lower than in North America.
"Weakness in our European markets, which comprised the majority of our international business today, created a significant drag on performance with over $70m of impact on gross billings quarter-over-quarter," Groupon's CEO Andrew Mason told an earnings call, according to a transcript on Seeking Alpha.
As well as the ongoing macroeconomic woes in the continent, technology has been having an effect on the company's bottom line.
"We are in the very early stages of the global deployment of the products, tools and services, such as deal personalisation, that have already driven meaningful growth in the US. At our current scale, the opportunity cost of not realising the customer benefits and efficiencies we can capture through better technology integration are significant," Mason said.
The company has not introduced the same IT — such as technology to personalise the selection daily deals sent out to users — in Europe as it has across the pond.
In the US, Groupon has already rolled out SmartDeals personalisation tech, and recently upgraded the system to increase pool of deals it can use more than tenfold. It's hoped that the tech will mean more relevant deals being put in front of Groupon users, leading to better take-up of the offers.
The personalisation tech is in the early stages of testing in Europe. The UK is set to be the first region to go live with it, with Groupon's top five European markets to follow before the end of the third quarter.
Other tech tools currently available in the US but not in Europe include Groupon's Merchant Center, Scheduler, Subscription Center and some internal sales productivity tools. The tools should be coming in Europe in the next quarter, however.
Groupon has six different tech platforms around the world "all at various states of sophistication", according to its CEO.
"We have a goal to integrate these platforms so that we can leverage innovations and deploy innovations globally as fast as we're doing in the US. But anyone with any history of projects like that know that they aren't one quarter changes, and it would be foolish for me to speculate on exactly how long they're going to take," Mason said.