Groupon is branching out into supermarkets today as part of an initiative that will let shoppers use supermarket loyalty cards to make purchases.
Partnering with Boston-based Big Y supermarket, Groupon offered shoppers a $39.99 seafood grill pack for $24 in a prepaid deal loaded onto their supermarket loyalty cards.
This marks a move into the supermarket coupon space and puts Groupon in direct competition with traditional coupon companies Valassis Communications and New Corp’s SmartSource. It also creates the possibility for Groupon to partner with chains with large loyalty programs such as Safeway, CVS, or Walgreens to syndicate deals across brands and categories.
Potentially, Groupon could offer widespread deals on consumer packaged goods (CPG) through specific retailers.
Groupon is currently working on the project with Massachusetts-based marketing firm HaloEffect, and software company Incentive Targeting.
U.S. consumers spend $550 billion annually on groceries and consumer based goods, whereas companies shell out $25 billion on marketing and promotion, said Tom Schneider, president of HaloEffect.
He sees the partnership as "having the potential to revolutionize the grocery-marketing landscape."
Meanwhile, Incentive Targeting rep Ben Sprecher explained utilizing existing supermarket loyalty cards eliminates fraud concerns that have kept major manufacturers like Procter & Gamble from using print-at-home coupons offering by Groupon in the past.
He also predicted other retailers and packaged-goods companies would participate in similar deals in the coming weeks and months.
Using loyalty cards, supermarkets and CPG brands will get a deeper look into customer buying behavior and whether habits are altered after employing Groupon deals.