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Note to Groupon: Google is Coming After Your Deals

As I dropped a friend off at the airport recently and was meandering back through the terminal, I passed several fast food establishments.

But just as soon as I got a serious hankering for a Big Mac, I realized I’d left my wallet at home. All I had was my Nexus One smartphone.

While my arteries celebrated, I was encountering my first case of Google Wallet envy.

If you recall, this is Google’s foray into the mobile payment market, which allows you to pay for goods without even needing your wallet. No cash. No plastic. Just a special Near-Field Communication chip in your smartphone that completes purchases by waving the phone near a payment reader.

Google Wallet doesn’t officially launch until later this summer and coupled with another one of its new ventures – Google Offers, which is a direct challenger to Groupon in the daily deals space – I believe it’s only a matter of time before Google beats its market-leading competition.

Groupon Overload

You know those daily deals that you see from Groupon?

While they’re great for consumers, how exactly do retailers prepare for the rush of customers that they receive after signing a deal with Groupon?

Answer: They receive a video that provides some guidance. One of the tips? Bulk up on inventory and staff.

That seems like a given, but from a business perspective, it’s much easier said than done.

For instance, as the owner of Posies Café in Portland, Oregon learned the hard way, Groupon doesn’t always post your offer on time. As stressed in her (now viral) blog post on her experience with Groupon, her offer posted one month late. As a result, Posies Café was “bombarded” with customers after the feature closed.

And just like business owners, Groupon buyers can feel the strain, too.

For example, when my mother tried to claim her Groupon voucher for a visit to a local spa, the place was booked for weeks, just a few hours into redemption day. When she finally got there, a scheduling error (due to inadequate staff) cut her service short. And now she has to return to claim the rest.

Not the best way to build repeat business.

But Google is taking a different approach to providing support for its customers…

Google Provides Much-Needed Backup

In preparation for its coupon service, Google Offers, which will be fully integrated into its Google Wallet application, the search giant is already taking steps to ensure that it doesn’t follow Groupon’s hands-off business model.

Ahead of the Google Offers launch in New York City and San Francisco, Google sent flyers to local businesses in order to build interest for the event. It also plans to advertise deals on behalf of merchants by handing out samples from the businesses, too, so customers have a taste of what they’ll get when they redeem their Offer.

But it doesn’t stop there.

Once redemption day comes, Google will deploy extra staff at store locations to help them handle the hordes of customers. Plus, it’s giving away Google merchandise that’s targeted to the business (i.e. mugs for coffee shops).

As the flyer says, “We know day-after redemption can be daunting, so we want to provide you with the support, equipment and some extras to make the experience as smooth for you as possible.”

True, this is only for launch day. And there’s no telling if Google plans to repeat the event in other cities down the road. But it shows that the company is dedicated to streamlining the process for retailers. And I’d expect to see that same dedication as the company opens the service nationwide.

Check out my next article for more on Google’s superior approach to daily deals.

Good investing,

Justin Fritz

Justin Fritz

, Executive Editor

View More By Justin Fritz