【 Service Design 】Groupon Case Study × Food Delivery Service

CASE STUDY

Professor: Xenia Viladas Team: Kun Liu, Xinyu Wu, Alan Liu, Yuxuan Wang, Xuchen Zhang

School of Design, Department of Service Design, Savannah SERV 711 - Service Design: Principles and Practice Fall 2018

SERV 711 - Service Design: Principles and Practice

CONTENTS

01 02 03 04 05 06 07

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OUR TEAM

COMPANY ANALYSIS

Research, service package, current stakeholder current customer journey, business model

NEW MARKET SEGMENTATION

NEW CHANNELS

NEW MARKETING APPROACH

STAKEHOLDER& ECOSYSTEM

NEW BUSINESS MODEL

Market research, new value propositions, persona, new customer journey

Channel maps

Competitor research, storyboard, new key activity, blueprint

New Stakeholder map& ecosystem map

New business model for Groupon

OUR TEAM

KUN LIU INDUSTRIAL DESIGN MA

SERV 711 - Service Design: Principles and Practice

XINYU WU SERVICE DESIGN MFA

ALAN LIU DESIGN MANAGEMENT MFA

YUXUAN WANG INTERIOR DESIGN MFA

XUCHEN ZHANG INTERIOR DESIGN MFA

COMPANY ANALYSIS Groupon is an American worldwide e-commerce marketplace that offers discounted gift certificates usable at local or international companies. Groupon’s mission is to become the daily habit in local commerce. They have a strong relationship with local commerce because they believe that local commerce are the economic backbones of the neighborhood we live in. The local commerce are job creators, meeting places, cultural hubs and, occasionally, local legends. Therefore, Groupon offers the desirable discount to customers and brings more customers to the local commerce so it is a circle relationship between customers, local businesses, and Groupon platform to reach win-win situation. In the future, we expect Groupon takes their original advantage to expand their business into various service and explore more potential opportunities through service design.

SERV 711 - Service Design: Principles and Practice

Basic Information about

★An American worldwide e-commerce marketplace connecting subscribes with local merchants by offering activities, travel, goods and service in 15 countries ★Launched in November, 2008 in Chicago by Andrew Mason ★The first market for Groupon was Chicago ★By the end of March 2015, Groupon served more than 500 cities worldwide

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Coupon Categories of

Art Babies & Kids Clothing Crafts Supplies Electronics Flowers & Gifts Green Living Hobby & Collectibles Luggage Movies & Music Office Supplies Party Supplies Pregnancy Tools & Hardware TV

SERV 711 - Service Design: Principles and Practice

Auctions Bingo College & Education Department Stores Event Tickets Food & Gourmet Grocery House & Home Malls Moving Online Pens Restaurants & Bars Toys & Games Weddings

Audio Books & Magazines Computers, Laptops & Tablets Detergent Financial Free Samples Haircare Jewelry Medical Musical Instruments Outdoors Pet Supplies Shipping Transportation Wholesale

Automotive Cleaning Products Costumes Discount Fitness & Diet Gift Certificates Health & Beauty Lotto Mobile Phone Novelty Parking Pharmacy Sporting Goods Travel

Leaders of

Rich Williams

Alison Allgor

Chief Executive Officer

Senior Vice President of Human Resources

Colin Bodell

Sarah Butterfass

Aaron Cooper

Dane Drobny

Chief Technology Officer

Chief Product Officer

President of North America

General Counsel and Corporate Secretary

Steve Krenzer

Mike Randolfi

Anita Samojednik

Chief Operating Officer

Chief Financial Officer

Senior Vice President, Global Operations

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Brian Stevens Chief Accounting Officer & Treasurer

Julie Szudarek

Roushan Zenooz

President of International

Senior Vice President, Corporate Development

Mission of To be the daily habit in local commerce.

BOOSTING LOCAL COMMERCE

AT A HIGH LEVEL

•

Active in 15 countries & 500 + markets around the world

•

Headquartered in Chicago, lllinois with more than 6000 employees worldwide

CUSTOMERS SATISFACTION

• • •

49.5 million global active customers Over 90% customer satisfaction Ranked a top 5 eCommerce brand in U.S. by monthly unique users

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•

Has worked with more than one million merchants to date

•

Pumped more than $18 billion into local business

LEADER IN MOBILE

• • •

Boasts the #1 retail app on iOS & Android One of the top 25 most used apps of 2016 New tools are rolling out all of the time

Stakeholders of

As an e-commerce marketplace, Groupon not only build a bridge between consumers and companies, but also organize different business channel in a community that provide other roles in it, such as advertisers, local merchant, agencies, shareholders, communities and so on.

SERV 711 - Service Design: Principles and Practice

Current Customer Journey map of

SERV 711 - Service Design: Principles and Practice

Current Customer Journey map of

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Customer Archetype of

Sepatated/ Divorced/ Widowed 5% Married 30%

Male 23%

Marital Status

Single 45%

Female 77%

Ling w/partner 20% Single Married

Gender

Ling w/partner Sepatated/ Divorced/ Widowed

Single users are more than users who already get married.

Male

Female users are in the majority, which is more interested in the deals or coupes that Groupon provided online.

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Female

Customer Archetype of

Household keeper 3%

less than $19k 7%

Retired/Unemployed 10%

$20k-$26k 12%

Student 12%

$27k-$34k 12%

Employment Full time 75% Full time Retired/Unemployed

Student Household keeper

75% users of all users are having a full time job, which may cover their daily spend.

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over$70k 29%

Income $45k-$65k 19%

$35k-$44k 21% over$70k $27k-$34k

$45k-$65k $20k-$26k

$35k-$44k less than $19k

29% users’ annual income are higher than $70k.

Customer Archetype of 55+ 3%

Graduate degree 30%

44-54 11% 35-44 18%

Age

Education 10-34 68%

Under graduate degree 50%

6th form college 12% Apprentices 3% Vocational course 5%

10-34

35-44

44-54

55+

68% users are younger than 34 years old.

SERV 711 - Service Design: Principles and Practice

Under graduate degree 6th form college Vocational course

Graduate degree Apprentices

80% users are having an undergraduate level degree or even higher.

Target Market of

TWO SIDED MARKETPLACE FEATURED MERCHANTS

CONSUMERS

-The Point's platform: if a certain number of people signed up for the offer, then the deal became available to all.

-Based on demographics, it is easily shows that Groupon target their users as young single users who is well educated and have good income, which can handle their daily spend.

-Small local business.

-Goods From factories that has lower cost.

-Groupon serves 500 markets and 15 countries.

MARRYING SUPPLY AND DEMAND THROUGH PRICE AND DISCOVERY

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Type of site: Electronic commerce Available in: English and others (for 27 countries) Headquarters: Chicago, U.S. Owner: Groupon Created by: Tim O'Shaughnessy, Aaron Batalion, Eddie Frederick, Val Aleksenko Key people: Gautam Thakar (CEO & President) (before company was acquired by Groupon) Revenue: $57,000,000 (2015) Employees: 200+ (2018)

Type of site: Online deal marketplace Headquarters: Chicago, Illinois, U.S.A Founder(s): Andrew Mason, Eric Lefkofsky, Brad Keywell Chairman: Eric Lefkofsky CEO: Rich Williams Industry : Electronic commerce Revenue: Decrease US$2.84 billion (2017) Net income: Increase US$14.04 million (2017) Employees: 6,000+ (2018)

Direct Competitors of

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Indirect Competitors of

As Groupon looks to expand beyond

Groupon Goods competes with

"Local" is a hard nut to crack, and

daily deals to become a marketplace

Amazon. Facebook is testing "Local

while many players seek to find a

for local commerce, the company

Market", a buying and selling

comes into competition with many

community powered by Facebook

foothold in the space, Groupon

large players.

groups, that also indirectly competes with Groupon.

continues to have a significant advantage because of its relationships with 150,000 local businesses in the United States alone.

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Sales Forces of

•

•

Number of Groupon's merchant sales representatives and sales support staff from1st quarter 2009 to 2nd quarter 2018

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The statistic above shows the size of Groupon's sales force as of the second quarter of 2018. By the last measured quarter, the number of inside and outside merchant sales representatives, as well as sales support staff, amounted to 2,373, down from 2,485 sales employees of the corresponding quarter in the previous year.

Global Annual Revenue of

This statistic shows Groupon's global annual revenue from 2008 to 2017. As of 2017, the daily deal website's annual revenue amounted to 2.84 billion US dollars.

•

Global Revenue of Groupon from 2008 to 2017 (in million U.S. dollars)

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Corporate Culture of

Global Collaboration

Match  Consumers with Merchants

Diversity & Culture

An On-demand Marketplace

Anywhere Anytime

Connect Local Commerce (in-win)

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Values and Strategic Intent of

IN 2015, GROUPON CONTINUED ON ITS MISSION TO BECOME THE DAILY HABIT IN LOCAL COMMERCE — MAKING SOME OF OUR MOST SIGNIFICANT PROGRESS ON THIS FRONT IN OUR SEVEN-YEAR HISTORY.

SERV 711 - Service Design: Principles and Practice

Service Offering Map of

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Business Model of

Internet&other coupon provider Merchant

Marketing Marketing investigation Discounts margins Increase purchasing frequency B2B sales force Supply&demand analysis

Website Reputation Brand Network Delivery Company

App Marketing Taxes Offices SERV 711 - Service Design: Principles and Practice

Employees Website infrastrusture Consumer database Merchant acquisition

Connect merchants to consumers by offering goods&services with discounts

Wide range of discounted offers Trust Network Community

Effective advertising fast build prospect List local deals Groupon getways

Website Mobiles apps Email B2B sales Merchant web portal

Free on transactions New products credit cards New products (Glive) Ancillary services

Local consumers Goods&service merchants Travel agencies

NEW MARKET SEGMENTATION

Company Wholesale Service

Food Delivery Service

New market segmentation part includes Market Research,New Value Propositions, Persona and New Customer Journey.

SERV 711 - Service Design: Principles and Practice

New Value Proposition 1 ——Company

Current Situation

Currently, Groupon focuses on

Wholesale Service

New Opportunity

According to research, companies have

“business to person” business strategy that

amount of needs to wholesale items or services

builds a bridge between different

which is a potential opportunity for Groupon to

companies and their consumers to provide

develop their service for “business to business”.

goods or services.

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OFFICE FURNITURE COMPANY PERSONA

BRIEF INTRODUCTION Formerly: Metal Office Furniture Company Type: Public • Founded: March 16, 1912 in Grand Rapids, Michigan, United States • Headquarters: Grand Rapids, Michigan, United States • Revenue: US$ 3.1 Billion(2015) • Number of employees: 11,000 (2014) • •

INNOVATION

“And because protecting the environment is in our DNA, we drive sustainable social, economic and environmental change through our decisions and actions. we don’t just do what’s right, we do what’s best — for people and for the planet.”

PRODUCTS •

SERV 711 - Service Design: Principles and Practice

Office furniture, architectural and technology for office environments and the education, health care and retail industries.

DIGITAL MEDIA COMPANY PERSONA

BRIEF INTRODUCTION • Formerly: Digital Media Company • Type: Public • Founded: Launched in October 2010 •

Headquarters: San Francisco, California, United States

INNOVATION

“We create a social networking application that allows users to share pictures and videos with their followers. It’s a free mobile app exclusively for the iOS operating system, but has now evolved into a multi-platform social network.”

PRODUCTS •

SERV 711 - Service Design: Principles and Practice

Social networking application.

Customer Journey Map ——Company

Wholesale Service Business 2 (Supplier)

Business 1 (Demander) Sign in

1

Post Demand (Fill Application)

2

Receive Confirmation

3

Waiting Check The Optimal Choices Make a Decision

1

Sign in

Collect Requirement

2

Match Order

3

Check Capability

4

Decision(Fill Forms)

Integrate

(Fail)

4 5

Receive Confirmation

6

Place Order

7

Receive Goods/Services

8

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Collect Data

Waiting

Analyze/Filter

6

Receive Demander’s Confirmation (Success) Place Order

7

Deliver Goods/Services

5 Match Confirmation

New Value Proposition 2 ——Food

Delivery Service

“Local business hidden a huge value.”

New Opportunity Shopping

Food Delivery Service Touring

Local Business Restaurant

Since Groupon has collected amount of local resources, it’s much easier for it to launch food delivery service with a much cheaper and convenient business strategy.

Transportion

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29

FOOD DELIVERY SERVICE PERSONA 1 JACK- A OFFICE EMPLOYEE BRIEF INTRODUCTION •

Office employee

28 years old • $5500 p.a disposable income •

•

More than 6 times food deliveries, more than 6 times restaurant per week.

LIFE STYLE Love hanging out with friends.

• Single • Shared living situation • Rarely cook •

“I hate cook because it spends me lots of time.”

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FOOD DELIVERY SERVICE PERSONA 2 LILY- A RESTAURANT OWNER BRIEF INTRODUCTION •

Local Restaurant Owner

Opening the restaurant for 1 year • 32 years old.

•

•

Low capital for investment.

RESTAURANT INTRODUCTION Low margin operations • Sourcing small quantities • Simple digital presence • No proprietary delivery •

“Many visitors come to my restaurant to enjoy local taste.”

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Customer Journey Map ——Food

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Delivery Service

Customer Journey Map ——Food

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Delivery Service

Weakness

Strengths

Food Delivery Service SWOT Analysis

-Offer desirable discounts to customers -Wide range of discounted offers -Offer a lot of options for customers -Reduce the thinking time -Free-delivery service for the quantity reaching to a certain amount -Fast and efficient order process -Simple and convenient interface

Opportunities -Any other place of dense population -Increase customers purchasing frequency -Influence the customers behavior -Connect Community -Network -Build trust between people -Reinforce cooperation with company -Foresee customer preference

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-Brand new service -Reputation -Trust -Loyalty of customers

Threats -Other online food delivery competitors (like Ubereat) -Other online coupon companies

NEW CHANNELS

SERV 711 - Service Design: Principles and Practice

NEW MARKETING APPROACH —— Food Delivery

In order to improve food delivery service strategy, the team try to do more competitor research that understand food delivery marketing deeply. Then, the new key activity is formed that the team explains by storyboard. Finally, the team shows a Food Delivery Service blueprint.

SERV 711 - Service Design: Principles and Practice

Competitor research of

Type:Subsidiary Industry Online food ordering Founded August 2014; 4 years ago Founders Travis Kalanick (CEO), Garrett Camp Headquarters San Francisco, California, United States Area served Worldwide Key people Dara Khosrowshahi (CEO) Thuan Pham (CTO) Ryan Graves (COO) Parent Uber Website ubereats.com The platform occasionally features food from local celebrity chefs wishing to increase their public visibility, including some who do not have physical restaurants.

People can sign up to deliver food orders for Uber Eats using their car, bike, scooter, or on foot. Delivery partners earn money for each delivery trip based on number of trips and the distance between the restaurant and the dropoff location.

SERV 711 - Service Design: Principles and Practice

Competitor research of

Grubhub Inc. is an online and mobile food-ordering company that connects diners with local restaurants.

Based in Chicago, the company has more than 14 million active diners, and approximately 80,000 restaurant partners in over 1,600 cities across the United States and the United Kingdom.

Type Public Traded as NYSE: GRUB Russell 1000 Component Industry Online platform for restaurant pick-up and delivery Founder Matt Maloney Mike Evans Headquarters Chicago, Illinois, United States Area served United States Key people ●Brian McAndrews ●(Chairman of the Board) ●Matthew Maloney ●(Co-Founder & CEO) Subsidiaries Eat24, LevelUp, Seamless Website Grubhub.com

SERV 711 - Service Design: Principles and Practice

Storyboard for

Step 1

New Food Delivery Service

Step 2

Step 3

Step 4

Step 6

Step7

Step 8

Who wants to join the order of XXX restaurant?

Step 5

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New Blueprint Map of

SERV 711 - Service Design: Principles and Practice

STAKEHOLDER & ECOSYSTEM

New Stakeholder Map

Ecosystem Map

According to the new value proposition, we create a new stakeholder map for Groupon food deliver service that describes with the relationship between original stakeholders and new stakeholders.The Ecosystem Map explains how different stakeholders work as an entirety.

SERV 711 - Service Design: Principles and Practice

New Stakeholder Map

The new stakeholder map shows some new stakeholders that help Groupon develop food delivery service, such as food delivery company, manufacture, small business and so on.

SERV 711 - Service Design: Principles and Practice

New Ecosystem Map

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NEW BUSINESS MODEL

Internet&other coupon provider Merchant

Marketing Marketing investigation Discounts margins Increase purchasing frequency B2B sales force Supply&demand analysis Develop&cooperate new relationship

Connect merchants to consumers by offering goods&services with discounts

Cooperate with delivery company Deliver Food

Food delivery service with discount

Effective advertising fast build prospect List local deals Groupon getways

Wide range of discounted offers Trust Network Community

The new value propositions improve Groupon original business model from many perspectives. In

Website Reputation Brand Network Delivery Company Local restaurant

the future, Groupon would change into a database company that

Website Mobiles apps Email B2B sales Merchant web portal Transpotation

provide almost every markets latest trending analysis.

App Marketing Taxes Offices

SERV 711 - Service Design: Principles and Practice

Employees Website infrastrusture Consumer database Merchant acquisition

Free on transactions New products credit cards New products (Glive) Ancillary services

Local consumers Goods&service merchants Travel agencies Millennials

References

https://images.unsplash.com/photo-1497215842964-222b430dc094?ixlib=rb-0.3.5&q=85&fm=jpg&crop=entropy&cs=srgb&dl=alesia-kazantceva-283291-unsplash https://images.unsplash.com/photo-1454165804606-c3d57bc86b40?ixlib=rb-0.3.5&q=85&fm=jpg&crop=entropy&cs=srgb&dl=helloquence-61189unsplash.jpg&s=f3d8e6767d5681f421f0fc247826d1c3 https://images.unsplash.com/photo-1533125357010-c7201ffe8060?ixlib=rb-0.3.5&q=85&fm=jpg&crop=entropy&cs=srgb&dl=jlelse-761910unsplash.jpg&s=dc05ebfec57d631e1a2766f0e0e62d3a https://images.unsplash.com/photo-1516251193007-45ef944ab0c6?ixlib=rb-0.3.5&q=85&fm=jpg&crop=entropy&cs=srgb&dl=jakob-owens-518866unsplash.jpg&s=4c209fbccba66104a3e47f3e27a6853a https://images.unsplash.com/photo-1469002372271-3406b43e1f27?ixlib=rb-0.3.5&q=85&fm=jpg&crop=entropy&cs=srgb&dl=josh-calabrese-112481unsplash.jpg&s=fb3633d9a80e9dec78dd8d7218d6e13f https://images.unsplash.com/photo-1526367790999-0150786686a2?ixlib=rb-0.3.5&q=85&fm=jpg&crop=entropy&cs=srgb&dl=kai-pilger-666758unsplash.jpg&s=f89741aac747f4908b2b679c0bc0dfc0 https://en.wikipedia.org/wiki/Steelcase https://techcrunch.com/2018/09/24/instagram-founders-leave/ https://www.statista.com/statistics/273249/number-of-groupons-sales-representatives/ https://ibcomtransmedia2012.wordpress.com/2012/10/19/groupon-business-model/ https://en.wikipedia.org/wiki/Groupon https://en.wikipedia.org/wiki/LivingSocial https://www.similarweb.com/website/groupon.com https://press.groupon.com/about-groupon/ https://www.groupon.com/blog/author/thearichw https://jobs.groupon.com/

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