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Groupon purchases dining discount site Savored

Groupon continues to expand its deal model, can now reach different class of restaurant

Financial trends and news by Steven Loeb
September 24, 2012 | Comments
Short URL: http://vator.tv/n/2a66

As the daily deal craze seems to be slowly coming to an end, Groupon has decided that it will not go gently into that good night. Instead, the website has been branching off into multiple directions lately, and made a purchase on Monday that signals that it intends to continue to survive despite the fact that it no longer seems to have to do what it is best known for.

Groupon purchased discount dining website Savored, it was announced Monday.

The terms of the deal were not disclosed, but Savored will still continue to operate, and will work alongside Google Now, an app designed to using GPS to locate the closest and best deals for food or entertainment.

It will also give Groupon access to a class of restaurant that may not have been as interested in taking part in Groupon's previous deal model.

Savored is also deal website, but one that provides discounts to its member for buying something. Members of the site are able to search for high end restaurants, and make reservations online, which then entitles those who buy to discounts of 15 to 40% off. At one point there was a $10 fee to make a reservation, but the site dropped the idea in May.

The platform diverges from Groupon's daily deal model, in which users bought services at a discounted price, which they would then cash in at a later date. 

“Savored’s platform nicely complements Groupon’s efforts in yield management, an area we’ve pioneered with Groupon Now!,” Dan Roarty, VP of Groupon Now, said in a statement.

“We look forward to working together to achieve a common goal - making dining out even more fun and affordable for consumers while helping restaurateurs manage inventory and grow their businesses.”

“Together, Groupon and Savored will be able to deliver even more exceptional dining experiences to consumers while continuing to focus on restaurant profitability. The Savored product will remain sophisticated and elegant, enabling diners to make reservations at the very best restaurants and receive discounts of up to 40% seamlessly taken off their bill,” Savored co-founder Benjamin McKean wrote in a blog post Monday.

New York-based Savored was founded in 2009 as VillageVines by McKean and Daniel Leahy. It raised $3 Million in its first round of funding from Hearst Interactive Media, GrandBanks Capital and High Peaks Venture Partners in January 2010, before renaming itself Savored in June 2011. Savored offers discounts to over 1,000 restaurants in 10 cities: Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, New York, Philadelphia, San Francisco and Washington D.C.

Groupon’s other services

For Groupon, it seems that the daily deals themselves, which are the heart of Groupon’s business, have been slowing down. Groupon has had to rely more and more on its other businesses.

The biggest daily deal website, Groupon missed revenue estimates in its second-quarter-earnings report, earning $568 million in revenue, while expectations were for $578 million, causing shares to tumble. Over the last few quarters, Groupon customers have been spending less and less.  The average Groupon customer in Q2 2012 spent $165, compared to $179 in Q1, $187 in Q4 2011, and $189 in Q3 2011. 

For this reason, instead of only relying on daily deals for revenue, Groupon has been expanding into new territories.

There is Groupon Goods, which was launched in March 2011, and expanded the daily deals from services and gift cards at brick-and-mortar stores to mail-order merchandise, and which accounted for more than half of Groupon’s Q2 direct revenue.

Last week, Groupon announced that it has created a mobile payments system, called Groupon Payments.  Like other payments apps, such as Square and PayPal, Groupon Payments uses a little plastic dongle that merchants plug into their iPhone or iPad to start swiping credit cards. 

Groupon and Savored could not be reached for comment.

(Image source: http://savored.com/nyc/)


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