Shares of Groupon (NASDAQ: GRPN) have given investors a return of over 73% in the months of May and June. These are positive indicators of a turnaround for this significant e-commerce operator.
By the end of 2023, Groupon will have saved $250 million in annualized costs, according to its first quarter 2023 financial statistics. The management has also made public its transformation strategy to restructure Groupon and reposition the company for future growth.
At the conclusion of the first quarter, there were about 18.2 million active Groupon users, down from 22.2 million at the same time the previous year. For the seventh straight quarter, the number of international active local customers increased year over year.
On January 25, 2023, the board of directors of Groupon, Inc. authorized the second phase of the company’s multi-phase restructuring plan, which is a part of the overall cost-savings strategy. Groupon revealed last week that it had further decreased its headcount by 500 workers in an effort to save costs. The e-commerce company terminated 500 workers in August 2022, or nearly 15% of its whole workforce. The company’s SEC filing states that the employment layoffs will save millions of dollars annually.
In addition, the company plans to implement additional non-payroll measures described in the 2022 Cost Savings Plan, such as reducing expenditures on software, technology, and professional services. These initiatives are expected to result in further annualized cost savings of $30.0 million.
Approximately 20 million people use Groupon. Over 15 million of these individuals have been utilizing the network for at least five years. Most users on the platform are active buyers and sellers. Prescience Point has previously claimed that this data proved the company was a force to be taken seriously. Market analysts had also noted a lack of value in Groupon’s core operations.
Groupon boosted the efficiency of their marketing spending by focusing more on lower funnel performance channels and switching from incrementality to ROI targets in Q1. As a result, efficiency improvements, particularly in search engine marketing, and a drop in marketing spending as a percentage of gross revenue were made. Groupon is now focusing on boosting returns in performance channels before switching back to mid- and upper-funnel channels.
Thus, Groupon keeps working toward its goal of developing a market place where customers can buy items and services that enhance and make life more enjoyable.
Target (TGT) is trending around $140 while Etsy is now trading at $90.Wish is currently selling at roughly $9, while Groupon is at $7.
By the end of 2023, Groupon can easily recover, making it a decent investment and a terrific opportunity for the astute investor.
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