Groupon, the daily deals giant, announced that they bought Savored, a website that offered deals at 1,000 upscale restaurants in 10 major US cities. Groupon has purchased several companies lately, all of which provide services to restaurants, even though their stock price has not bounced back to their IPO level. The purchase of Savored is especially interesting as Savored selling point was that they were the anti-Groupon.
In Savored’s case, customers pay $10 for a reservation (which Savored takes) and received 30% off their entire bill. In essence, customers are footing the bill for the service that announces the deal, while the restaurants eat the discount (but are able to set greater conditions than with Groupon such as excluding prix-fixe meals)…
I have discussed both companies in the past at great length, often contrasting them. As Savored long held, the Savored model is different than the original Groupon system. With Savored, customers pay $10 to make a reservation (committing them) at a participating restaurant and receive a discounted price for their meal (normally 30% but it can go up to 40%).
In an acknowledgement to Savored’s success, Groupon plans to keep the Savored site running as is. Rightly, they understand that the Savored elite brand is more appealing to wealthier bargain hunters than Groupon’s mass appeal.
Each company is coming from different places to solve the same problem. Started in NYC, Savored has lined up some big names with stellar Zagat scores even though the company is relatively young. The allure of Savored for restaurant owners is the ability to bring customers in during slow periods. From cash flow to inventory to staff retention, the value of having traffic 7 days a week cannot be overstated. Upscale restaurants, especially, feel the pressure as their reputation is reliant on their talent (in the kitchen and out) and their consistent performance (based on inventory, staffing, even the perception of being busy).
Groupon has Groupon Now!, which is supposed to offer a similar service, albeit for less expensive restaurants. The customer is expected to act in a more spontaneous way (in response to restaurant owners needs). Groupon Now! never really got enough participation so Groupon has not really developed far into yield management. Savored offers them some know-how and perhaps, Groupon Now! will evolve into a more popular service.
Stay tuned for more.