Google Has An Offer That You Can’t Refuse: Google Offers, Groupon’s New Rival

Google Offers has made its splash into online discounting market a week ago in Portland, Oregon, testing this service. Google is taking aim at the behemoth of online discounting, Groupon. Offers is designed to help merchants with new customer acquisition. Google Offers, however, doesn’t follow the Groupon formula as much as you might expect. Certainly, many of the changes benefit restaurants while not compromising the appealing attributes that have made Groupon and LivingSocial forces of nature. Google is yet to work up a head of steam, but in the summer, Google plans to expand Offers to San Francisco and New York.

Let’s go through what Google brings new to the table. Foremost for restaurants, Google has communicated to Gourmet Marketing their willingness to be more flexible in price although it hasn’t yet happened in Portland (understandably as Google is trying to gain traction for the service). Surely, the improved cooperation by Google undermines Groupon and LivingSocial’s unreasonable condition that restaurants (and other merchants) offer at least a 50% discount. Suddenly, participating in an online discounting service is no longer a desperate marketing effort for restaurants. Additionally, a reduced discount may be a blessing for restaurants because it may attract higher quality traffic instead of hordes of customers who are out only for a discount.

For restaurant in particular, Google has enhanced online deals by paying the restaurant within a few days of the beginning of the promotion, in contrast to Groupon, which spreads it out over the length of the offer. Restaurants traffic normally becomes a controlled stampede and without payment, the restaurant is left to absorb the financial strain when it comes to buying inventory in preparation for additional customers.   Google Offers’ launch corresponds with Groupon releasing Groupon Now!. Sensing a competitor with deep pockets, Groupon breaks away from limiting their service to only one deal per day. No longer inching along, Groupon has a pop up for Groupon Now! when you go to their website. I think it’s no coincidence that Groupon revamped this service (they tried a similar program called Groupon Store, which was unsuccessful) right when Google Offers hit the scene with a deals program that permits multiple deals per day. Nonetheless, Groupon will have trouble shaking its reputation as being exclusively a deal per day.

Google Offers has its share of touches that make deals on Offers more compelling. For example, Google allows restaurants to have a tour of the restaurant. Customers can “Look Inside” and see what they are getting.Google Offers is supposed to complement Google Wallets, a collaboration between MasterCard and Google that enables customers to pay with a credit card through phones’ with Android GPS. Google syncs the two services together in the hope that the ease of Google Wallet where a customer just taps his/her phone on a PayPass reader will contribute to making Google Offers a success.

Many of our clients are in contact with Google concerning Google Offers, and most are pleased at Google’s willingness to listen to their concerns. As it hasn’t landed in New York, Google Offers is yet to hit the big time and see if it can muscle into the online discount market. But in the long run online discounting (especially with the increase of LivingSocial’s market share) will not be ruled by one company, which is a good thing for restaurants.