In brief: Tough times call for tough measures and that is exactly where Groupon is right now. Share value in the online marketplace is down more than 42 percent in early morning trading after announcing disappointing fourth quarter and full year earnings yesterday afternoon.
The company isn’t blind to the fact, either, and is making changes to right the ship before it is too late.
CEO Rich Williams said he was incredibly disappointed with Groupon’s 2019 performance.
“This performance shortfall, coupled with the significant headwinds we continue to face, call for profound change,” he added.
In short, Williams wants to transform Groupon into the local experiences marketplace. What once was a business driver has become a significant drag on the overall operation.
To get there, they’ll have to quickly exit the Goods category and dedicate resources to expanding the local experiences marketplace. The plan is to exit in North America by the third quarter and internationally by the end of the year.
Initially, Groupon was just that – a destination for finding discounts and deals on local experiences. But along the way in search of rapid growth, the company jumped on the consumer goods bandwagon, selling all sorts of products, from pet supplies and sports equipment to electronics and toys. In hindsight, the company should have stayed in its lane.