“The whole concept really comes down to Groupon being able to know its customers better and be able to serve more targeted offers for merchants,” he said.
Much of Groupon’s trouble came from its return policy. According to an audit of the company, it did not set aside enough money for customer refunds.
Many refunds are for Groupon’s higher-ticket items, such as travel packages, but Sena said Groupon takes a smaller cut of the money on these types of deals. “They need to make sure they’re reserving enough” for refunds, he said.
Groupon also faces competition from other services that help consumers find what they’re looking for, particularly Google and even Apple, he said.
“They’re still looking at major competitors in the local space who are well funded, who have mobile platforms,” Sena told CNBC.
Additional News: Groupon Makes Downward Revision to Fourth-Quarter Revenue
Additional Views: Groupon’s Market May Be Smaller Than It Claims: Analyst
CNBC Data Pages:
Evercore or an affiliate expects to receive or intends to seek compensation for investment banking services from Groupon within the next three months.