Dallas, Texas 05/06/2014 (FINANCIALSTRENDS) – Groupon Inc. (NASDAQ:GRPN) is now looking to offer discounts to bulk purchasers while offering more than 100 health, hygiene and household products from reputed brands like Dove, Gillette and Burt’s Bees. The company is launching this service as Groupon Basics and is offering 5% back in Groupon Bucks for future use for all purchases made through the new channel.
The company mentioned that presently there are limited products (less than 110 items) available and on the way it will offer more options including grocery items. Moreover, the service will only available in the continental U.S. and the carts that billed over $25 will ship for free. The discounts will be in range of about 20% to 30% as compared to retails prices.
The Key Rivals:
Groupon Inc. (NASDAQ:GRPN)’s bulk segment venture with Groupon Basics division is expected to directly compete with retail giant Wal-Mart Stores, Inc. (NYSE:WMT)’sSam’s Club division as well as with membership warehouses company Costco Wholesale Corporation (NASDAQ:COST). Both of these competitors are believed to be the leaders in the bulk purchase segment. However, Groupon Basics offer an advantage as the services doesn’t require any joining or membership fees unlike both of its rivals.
However, it would also be of interest to see how Groupon takes its bulk purchase segment in future and what strategies it will employ as against traditionally employed by leaders like Wal-Mart and Costco. As far membership fee is considered, Costco regarded it as an integral part of its business model having considerable impact on its profitability.
Groupon Inc. (NASDAQ:GRPN)’s stock marginally gained 0.14% on Friday and closed at $7.09. The stock traded with a volume of 13.24 million shares against its 30 day average volume of 17.17 million shares. At its previous close the stock was 44.44% below its 52 week high of $12.76 and about 27.52% below its 200 day simple moving average.