Groupon Tries to Get the Goods on E-commerce

Turnabout is fair play, in the hypercompetitive tech world especially. So perhaps e-commerce giant Amazon, which launched daily deals earlier this year, should have seen an assault from Groupon coming.

Just one day after announcing its merchant rewards program, the Chicago-based deal company is wading into the retail space with a collection of items it's dubbed "Groupon Goods." On Wednesday, the daily deal company released its first batch of U.S. Groupon Goods, a daily sale on assorted discounted merchandise, after quietly purchasing a series of domain names tied to the words "Groupon Goods" and reportedly testing out the concept in the U.K. market.

That's a direct hit at Amazon, which employed a similar approach. Amazon launched a deal-of-the-day offering after it bought Woot last year. And that's not it. The online retailing giant also helped Groupon's main competitor LivingSocial with a $175 million investment, and then went ahead and added to its revenues by offering LivingSocial-branded deals through its own offers platform, Amazon Local.

It's not difficult to see why Groupon might be holding a small grudge.

So what is Groupon doing with Groupon Goods? The initial batch of offerings includes an ionic hair dryer for $69, an LED HDTV for $440, and a coffe-brewing machine for $69. The discounts, Groupon says, range from 37 percent off to 60 percent off the retail price.

In its frequently asked questions section, Groupon explains its new product deals in typically quirky fashion (we have a strong suspicion that quirky CEO Andrew Mason had his hands on the keyboard for this.)

“To get airspace on Groupon Goods, a product has to be cool enough to share and innovative enough to inspire,” the statement said. “It also must be made of reliably bonded molecules and stardust. Honestly, if we think a product is remarkable and we can offer a good deal on it, we'll do so.”

Mason must have been the joker behind this line too:

“You buy them as you buy any other Groupon deal—clicking the ‘buy’ button in the email, or saying ‘deal, please’ three times into a convex mirror.”

Products may be ordered in two ways, depending on the terms of the deal. Some products come with codes that can be entered on the website of the merchant, which then handles the shipping. Other deals have Groupon as the go-between. Deals that use redemption codes expire 30 days after the deal closes, while those that are drop-shipped are fulfilled by the supplier.

Will Goods be good enough to help Groupon regain its IPO mojo, which seemed to dim with the departure of COO Margo Georgiadis, who headed back to Google after only five months with the company? That might mean another “deal, please” session in the convex mirror.

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Teresa Novellino writes for Portfolio.com