No, Groupon Isn't Dead. It's Still Based In Chicago And Growing Again.

(upbeat music) The story of Groupon is one of a meteor grise. Internet bargain hunters have been flocking in droves to Groupon, $500 million in revenue this year alone. Forbes calls Groupon the fastest growing ever. - We're the first people that have really figured out how a small business can do advertising see huge results without paying upfront. - Today it began selling on the stock market with one of the largest public offerings for a tech company since Google. At its height today shares soul for as much as $31 a piece, pushing the value of the company to nearly $20 billion. - And an incredibly steep fall. - Look at this, at its peak Groupon was worth more than $16 billion today. It is worth less than a billion dollars. Steep fees that hurt its relationship with vendors, bargain-oriented customers, unwilling to pay-- - Two at 10 Chicago-based Groupon laid off 500 employees today that have been affected include marketing and sales. The company also announced their scaling back on real estate to reflect a new hybrid workman. - The Groupon story, personal to many Chicagoans, with the company at one point located in the former Montgomery Ward warehouse along the Chicago River. On today's Block Club Chicago podcast, sponsored by Groupon, we turn the page to the next chapter. (upbeat music) Mike DePelli from Groupon, on what's next for this still Chicago-based company. And we hear from a Chicago area woman whose entire life changed thanks to a Groupon deal. (upbeat music) Hey, Mike, welcome to the Block Club Chicago podcast. Hey, John, thanks for having me. - How long have you been with Groupon? - This is the full circle moment for me, John. I've been with Groupon since 2010. I started in a temporary role in the customer call center. You know, one of those post-recession Chicago stories, it was just trying to get my foot in the door. Somewhere that was buzzing and Groupon was buzzing. A 14 years later, I'm still here. You know, life's a little different. I'm a new dad raising my daughter in the city. I love and grew up in and some days are diapers instead of deadlines, but the excitement's still the same. Chicago may have changed, but so has Groupon. We've swapped out the ping pong for preschool drop offs, but the energy is very much still alive. - So the story of Groupon, one of big ups, right? And big downs, and now as I'm sure you'll explain, it's on a way up again, right? It's a rebuild or a rebirth. I don't know the word you guys want to use to describe it, but I do have to ask, are you like one of the few employees left from that 2010 era? - No, there's a bunch of us, and it's not just Chicago. I mean, globally, you'll find people who I grew up with at an company who we all started as funky millennials, and now we're tired, not so young, millennials. There's a whole slew of us. I think rebirth or rebuild is the correct word. A lot's been written about Groupon. And I think it's so obvious to a Chicago audience that there used to be this huge building, and they had parties at the Aragon Ballroom, salt and pepper came and played, and all these sorts of things, and you haven't heard of us in a long time. What really happened to Groupon, there's been a lot of ups and downs over the years. We grew too big too early, and the company had contracted, but what really put us into a crisis was the pandemic. During the global pandemic, everybody knows the local businesses were closed, people stayed home. For us, our marketplace that was centered around local experiences globally, every local experience we shut down globally. And then when the pandemic ended, what we found is that it changed people's habits. People were missing experiences, but they sort of didn't know where to start. So that's where we saw the opportunity to reconnect people with meaningful local moments. In 2023, we had a new leadership team, and this team recognized that what Make Groupon special was this local connection, and they leaned into it. So we've been using our city-rooted DNA as the compass for rebuilding. And that connection, that's been with us in state one, our very first deal back in October, 2008, was a half price pizza for a restaurant on the first floor of the building, where our young team was working. And you know, it's not a fancy launch, but it's exactly the kind of city-rooted experience that we've been building ever since. Something really cool about this group that's come in is the first value they instill was radical transparency. All accountability, no fluff. And the ethos was that if we can improve every little piece of the business, just incrementally, it would compound growth. So we've modernized our tech. We've improved our operations. And in a way, we've gotten back to basics, which is just making it easy and affordable for people to enjoy local experiences. And it's still early, like this is a work in progress, and it's gonna be, but we're seeing the results. We've had eight consecutive profitable quarters, and we've seen extensive growth in North America and international local categories. So I think the ethos rings true that if every team owns its results, small improvements will add up. So it's not easy, but we've rebuilt trust with both merchants and our team. - So you grow too fast, you grow too quick. Lots of money spent on parties, as you mentioned. I'm sure a lot of other areas too. And really, it's kind of Chicago's very own Silicon Valley sort of story. And to us, it's personal, right? I'd say nearly every Chicago millennial, certainly, know someone who worked at Groupon, right? So what's different about this story, and I will admit, news to me, Groupon didn't finish off, right? It's not in a corporate cemetery. It was close to that, perhaps, it could have been. - It absolutely could have been. And I think the point is, is that the leadership team saw that there is actual value in this business model, not just for us, not just for consumers, but it could be for the merchants as well. - At its worst, Groupon has made poor decisions, but at our best, we actually are a connector between people and their local community, be it Chicago, all the way to Madrid, and we actually can connect them. The mission is there, and the value is there, and they believed in the business model. - This is a weird question, but what is Groupon these days? I can remember daily deals, I print it out, and back in the day, I heard of some businesses kind of complaining about how their side of things worked. The big building isn't Groupons anymore, it's not their home, so how does this come back logistically happen? - I think that Groupon isn't just daily deals anymore. It's a curated marketplace for local experiences. So yes, you can get your half-off sandwich, but you can also learn how to become a trapezoid artist. You can also learn how to ride a horse for the first time. Our things to do category is really our sweet spot, as well as our health and beauty, as well as our live events are, and we do have national brands as well. I think that's what makes Groupon so confounding, and also so interesting, right? It's where you can get a discount oil change, and it's where you can go target practicing with a hatchet for the first time. But our sales cycle is pretty interesting. We are still headquartered here. We moved into the Leo Burnett building about a year and a half ago. Now we have two floors of it. We're reimagining how we train and grow our sales team with our Groupon onboarding program. That's a hand-on 10-week boot camp followed by a six-month ramp. And it turns people, whether you have sales experience or not, we welcome everybody into confident full-cycle reps. The energy there is now contagious again like it's 2010. When I say full-cycle sales rep, by the way, we encourage our reps to get out and explore the cities they operate. Yes, we call, and we full-call. That's always going to be a part of it. But from Chicago to every market worldwide, we're sending our sales rights up, meeting local merchants, understanding their neighborhoods, connecting with the community. And that's what brings the human spark to our work. We have also upgraded our tech stack. I think that's pretty key. And we've invested heavily in the technology behind that experience. Our new platform we're internally following at mobile next, but it's just a total reroll out of what Groupon is. It's the backbone of us. It's faster, it's smarter. It's built to make discovering and booking local experiences effortless. So the new app, which has rolled out in North America, by the time you guys will listen to this podcast and will be an international early next year, it's cleaner, it's faster, it's more personal than ever. And we're using AI to match people with the right offers at the right time. We're being very deliberate. AI enhances how we serve people. It doesn't replace the human connection that built our business in the first place. What about the relationship between you guys and businesses? Those big flashy discounts, they were the really big draw in early Groupon days as I remember, but like people would buy them and then they'd never be willing to pay full price again. So how do you navigate offering the price that attracts a customer to a new experience? But still ends up paying off for the local shop in the long run. I mean, look, that's very true. We earned our reputation on value. But today it's about quality and trust. And I will say discounts amplify great experiences. They don't rescue bad ones. So we're reintroducing Groupon as a hyper local marketplace. And our belief on that is simple. Local is won by city and category, moment and intent and person. And if we get the right match, every merchant wins and every customer feels rewarded. We do find that people, when they are matched with an offer that is exciting, that is different. Let's say you go to your local Brazilian steakhouse and instead of just like a quantifiable number discount, you're getting a specific platter. They're more likely to come back. So we're seeing repeat purchase or frequency go up as well as redemption rates for merchants go out. We worked really hard on our margins for our merchants. I think we've been aligned in that in the past. And we've really restructured the way that we go to market with our merchants in a way that's equitable for them, for our customers and for Groupon to continue in the long term. The goal is to have a small business who tries us out as their active marketing campaign and realize that this is the best investment that's out there. We're the only marketing platform for your small business where people are actually trying the product where you know that the marketing reach happened because somebody came into the business and used that Groupon, right? - I think that people might listen and go, well, this is great, but you're still talking about these global experiences. And I wonder if there is, well, how is this gonna work? If you guys are still available across the world in so many different experiences with sales people, theoretically all over the world, selling and helping these local merchants grow, how does the company plan to manage that scale up and not fall under the same traps of what happened before? - That's a fair question. At one point in 2010, Groupon was called the fastest growing company in human history. When you grow that fast, there's gonna be gaps. So what we're doing and starting with Chicago, starting with our hometown, is going block by block neighborhood by neighborhood. It's a cheesy sounding line, but I say, I want the best spot in your town, not every spot in your town. And I wanna do that from Malkina to Mundo Line. And we're taking that playbook of slowly implementing a category manager and city merchant marketer and building a sales team from the ground up and going neighborhood by neighborhood and then suburb by suburb. We're taking that playbook and moving in international. We are seeing growth in international markets as well. Same has come back for us. Barcelona and Madrid, huge pockets in the UK, Manchester Birmingham, London. The playbook has been rolling out and we're seeing the same success. - Like I'm just trying to think of the consumer in 2010. I feel like something has changed within the last 15 years that has made us a little bit more rooted in our neighborhoods, in local experiences. We all wanna know where our food comes from. We all wanna know and support small business Saturdays. I almost wonder if maybe the timing of Groupon's rebirth is more better aligned with the customer this time around. Does that make any sense? - Yeah, yeah, you hit the nail on the head, John. I mean, that's what we're betting on. And I think also with the pandemic, we have seen that people are, we're gonna have a report coming out shortly. We're calling the RUT report. And it's because we're finding that consumers are less likely to leave their neighborhoods or go find experiences that people are more stuck at home in a routine, going watching streaming apps, ordering the same takeout, doing their one favorite hobby and less likely to try something new. We're trying to hit that gap. - How do you guys sell yourself again to consumers? Like a lot of people know the Groupon story. Lots of people may be surprised to find out that you're still around and I don't mean offense to that. It might be news to some people. So as you said, at one point, you were the fastest growing company in human history. So how do you reintroduce yourself to people and focus on the local? - We are 16 years old, but we're treating it like we're on day zero. We're hungry, we're focused. We're treating ourselves like a startup again. And that is what we're banking on, is being a vehicle to push people to discover something great, whether it be right outside their doorstep or maybe 10 blocks away. One of the reasons I wanted so badly to talk with Block Club Chicago is I feel that you've filled that void. I go to Block Club Chicago to figure out what new hot, breakfast sandwich is coming out there. What new restaurant is opening in Andersonville or Logan Square. And our goal is to make sure that people want to check out Groupon when they think, gosh, I haven't tried something new lately. I really want to learn how to golf. I really want to learn how to ride a horse. I really want to learn how to do a tough carpet pull, which is actually a deal we have in my neighborhood. And I think Groupon being a connector that's born here, rebuilding here and helping people rediscover their city one experience at a time is what we're banking on. - Is it more exciting to work at a place that got to have parties at the Aragon with so many employees and so many things or do you find the rebirth era just as if that more exciting? - This for me is the most exciting points in my career. I feel like so many of these big companies like ours that grow too fast and they're all based on stock, they do get left for debt. And instead, we've had this new leadership team come in and believe in the business model, believe in the people who really wanted to make this work. And we're being given ownership to go neighborhood by neighborhood. We still have parties, by the way, and they're always with our merchants. Whether we order food in, it's a Groupon merchant, whether we're going and having a little Christmas party. No, we're not renting the Aragon Ballroom anymore. And we don't need to do that, you know? We're here to support local businesses. I imagine your neighborhood bagel shop is also not renting the Aragon Ballroom. So why should we? But we are gonna rent our local roller rink that's on the site. It's more neighborhood focused and it's more transparent. [MUSIC] Mike, it was an interesting interview. Thanks for a little behind-the-scenes peek at what's happening in Groupon. Take care. Thank you, John. [MUSIC] After the break, the woman whose entire life changed because of a Groupon deal. [MUSIC] >> This week, Groupon's using its ad spot right here on Blockleaf Chicago to do something a little different. We're not talking about global chains or big national promos. We're talking about home. At the local restaurants, spas and experiences that make the city what it is. Groupon's mission is simple. To be the trusted destination for discovering high-quality local services and experiences at unbeatable value. And there's no better place to see that mission in action than right here in Chicago. Grab a slice of history at Pizzeria Uno in River North, the birthplace of Chicago's original deep dish, or head out to Blueberry Hill Cafe in Darian, Lagrange, or Oakbrook, a family-owned brunch favorite for generations. Need to recharge? Try pure serenity spot in Lincoln Park, one of Groupon's highest rated massage experiences, or create something personal at Seventy Candle Bar in Oak Park. A hands-on experience that smells as good as it feels. Looking for a day out with the kids? Funtopia in Naperville brings adventure to life with climbing walls, ninja runs, and fun for all ages. Or check out Wonderverse in Oakbrook, a huge entertainment hub packed with games, food, and nostalgia. These are just a few of the thousands of local merchants partnering with Groupon to help people reconnect with their city, one experience at a time. So the next time you're looking for something new to do this weekend, start local, turn life on with Groupon. - Brigette, welcome to the Block Club Chicago podcast. - Thanks for having me. - So your story's fascinating in that... Well, first of all, anyone that does anything with trapeze to me is exciting and fascinating. Let's start with how you got into it, and how Groupon kind of helped you get into it. - Yeah, so one of my best friends, once we found out about Cirque du Soleil, we would go and see him every time they were in town. You know, me being a gymnast is a kid, and you know, I love flipping and all that fun stuff. I kept watching it and was like, man, I would love to try this stuff, but you know, where are you gonna do that? And she found a Groupon for the school that wasn't Chicago at the time. This was 14 years ago. She was like, oh yeah, she'd love this. And she was right, I was hooked immediately. Not only did I go that day and absolutely was like, I can't believe they're gonna let me try this, but my first catcher, Brian, is now my husband and my business partner. He was working there and after a few months, we started dating after another few months, I started working there a little over two years ago. The owners were tired and they had several different schools and they offered out the schools to the managers of the school first, which was me and Brian. And we're like, sure, we should try to do it. We know the community, we love the community. Like we wanna be a part of it. So yeah, that one Groupon like set me on a path to a whole different life. - I mean, it's your whole life. I didn't even know about the that you made your husband there. That's incredible. - Yeah. - Yeah. - By the way, you said your catcher, what is that? I assume they are just like a sponsor, but for Treppies? - No, so for Treppies, there's, you know, the person that works on the platform, there's a person that jumps off, swings over, and then there's a person swinging on another bar and you reach out and you grab and catch and, you know, swing together and then they, you know, set you in the net or return you or depend on what level you are. So yeah, he was, he was the very first one that caught me and more what we is than one, apparently. - That's an awesome story. That's like a real good meat cute. Flying through the air, finding your husband at the end of your outstretched arms is quite cool. So you're able to open up this business, tell us a little bit about it. Give it a drop, drop us the name, the details, and how people can get involved with what you do. We are now get a grip Treppies in Chicago. Get a griptreppies.com is our website. We do drop-in style classes. We teach Treppies, trampoline. We do some aerials, sometimes we do some acro. So a whole bunch of different options for people to try. In the summer months, we're set up right by Foster Beach, right overlooking the lake. It's gorgeous view, but we're lucky enough to have an indoor facility a little bit farther north inside the Broadway Armory where we can do year round. And one of the bonuses of inside is we have Tivo. We have like four different cameras set up so you can come down and kind of watch what you did and see, you know, it's a great learning teaching tool. - You mentioned you had gymnastics experience. Does someone-- - In a little kid. - Okay, okay, but you had at least done something. Can people come in like, I have no idea what I'm doing? - Yeah, oh, for sure. So the owners of the previous school, like they were scientists that just went to a club mad and tried it and were like, we wanna make this more accessible to people. This is amazing. And so they started and several schools across the US, which like we took over the Chicago branch basically. We take beginners almost every day. We have some people that sign up for workshops and we have a little performance at the end so they get to like perform and show their family and friends what they've been doing. And it's just like a free show that we run every 10 weeks. I have an awesome costume closet from this because of a theme. So we have to dress up every time. - Right, right. - Quite the collection, yeah. It's a lot of fun and people are surprised and they show up scared and they usually end up leaving just so proud of themselves for what they were able to accomplish in an hour and a half or two hours. Or if you go with the momentum, things are easier and much more doable than people would think. I love watching people's faces when I'm like, oh, you're gonna do a backflip, just mount down and they're like, I'm sorry, what? - You found your place and it happens to be dangling or swinging or whatever it is from the sky. Other people find it scuba diving deep in the ocean, right? Like I think everyone finds their little home where they are at their most, maybe relaxed isn't the right word, but most at peace. - Yeah, we have such a great community of people of students, they're all supportive. It's not really a competitive environment. It's very inclusive. I have a six year old that flies. I have a 74 year old that flies. We have a deaf girl that flies. We just work with them as much as we can and it's very individualized. So one of my favorite things is watching somebody's struggle in a whole class and then they finally achieve that thing at the end and everybody in the class just roars up in cheers for them. And it's so just heartwarming to watch and to be a part of. - Do you guys advertise then with Groupon now? Have you begun a partnership with them or done anything with Groupon in the last couple of years? - Yeah, we actually, so when we initially started, I talked to somebody at Groupon 'cause I did wanna be a part of it, but we weren't able to come to an agreement. And they, like I talked to somebody again and we kind of like reworked the numbers. We were able to come to an agreement and it's been doing great for us, honestly. Like we've had tons of Groupons come through and even our redemption amount is right up there with how many we've sold, which is amazing. And it's like great advertising, but advertising you don't have to pay for until you don't have to put anything up front. If they get paid, you get paid. So it's kind of nice that like if we don't make any sales with them, we don't have to pay anything. So, but our name is still out there. - I didn't thought about that. There's actually the advertising aspect of it as people scroll around and look for what they wanna do. Hey, they see your name, maybe not today, but maybe that catches their interest for tomorrow or they tell a friend like with you, oh, maybe this will be something you're into. Is a Chicagoan? I was honestly actually kind of shocked. I didn't know that Groupon had had this kind of rebirth to scaling down and bringing it back. I don't know if you went through a similar like, I remember Groupon back in the day. Oh, it's still a thing, how cool? - I mean, I really thought they had kind of fallen off a bit and had been like a little bit outdated. And then when we started booking with them, we saw like a huge influx of customers. So we were like, okay, this is gonna work. Like it's very trackable and you know that you're getting something from it. Anything else you wanna share with our, well, give us the elevator pitch. Why would you be checking you out? Where should we check you guys out at? - You go to our website. Obviously you can buy a Groupon if you're a first time student and sign up online. You just have to register ahead of time 'cause you can't just show up. You have to like reserve a spot, a first class for people. We basically work with you with wherever you're at. - That's awesome. - You're too scared to do the trick. That's fine. We'll just swing the first time. But in a first class, we do attempt to teach a knee-hanging a backflip dismount and if you can do that with limited difficulty, you even get to try a catch in your first class and may find your future husband. You never know, you know. (laughing) (upbeat music) - Forget this was awesome. It's a great story. Thanks for sharing it with our listeners. - Thanks for having me, John. Nice to meet you. (upbeat music) - For more on Groupon, head to Groupon.com and get a grip trapeze.com and I'll link to both in the episode show notes. For more stories from our nonprofit newsroom, head to blockclipschicago.org. That'll do it for today's episode. I'm John Hansen, next pod scheduled for Tuesday or whenever a big story breaks. (upbeat music) [MUSIC]