Groupon is getting into the loyalty cards business, AdAge reports.
For today’s deal in Massachusetts, you can redeem your coupon with your store loyalty cards.
This is a big deal for two reasons: a) it puts Groupon more squarely in competition with traditional coupon businesses who work with big retailers (as opposed to local businesses) to do marketing; b) it puts it directly into competition with the other super-hot local ad startup, Foursquare.
Foursquare’s business plan from the start has been one of the holy-grails of techland: to take over the loyalty programs of small businesses and “become” their loyalty cards. Why use these annoying cardboard things where you punch holes, when you could do things through a computer and thereby know more about your customers, be able to reach them better, tailor promotions, etc?
This is a huge opportunity, but also very hard to do because it’s very hard to sell to local business and get them to use a new technology. Foursquare looks like it has a good shot, with its rocketship traction. And now Groupon wants a piece of the action.
This isn’t the only way Groupon and Foursquare compete: Groupon’s future success relies on an app called Groupon Now, which suggests stuff to do when you’re “hungry” or “bored”. This happens to be what Foursquare’s new Explore feature, which was the major focus of its last major release, does.
Foursquare wants to be your mobile, social city guide that suggests stuff for you to do in the city (hopefully, with some of that stuff being paid promos). Like Groupon Now. Groupon CEO Andrew Mason even uses Foursquare’s catchphrase, “unlock the city”, to describe what Groupon wants to do for consumers.
In short, everything that Foursquare does or wants to do except check-ins, Groupon now does or wants to do. The two companies might have been great partners. Now they’re officially competitors.
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