2017 Shareholder Letter

Dear Stockholders —

In 2017, Groupon made important strides toward becoming a preeminent global marketplace for small businesses and a daily habit for consumers. In the process, we continued to build our voucherless future — which we see as an important innovation for customers and merchants alike — while investing in the core strengths that have made Groupon a force for business development and growth in thousands of communities around the world. We also delivered strong performance for stockholders over the course of the year.

We did this by delivering on the key priorities that we believe will drive the biggest impact for Groupon customers, merchants, stockholders and employees: enhancing the customer experience, establishing Groupon as an open platform that takes advantage of our scale, unlocking the potential in our international business and maintaining our culture of operational efficiency.

These priorities — coupled with another year of focused performance from the Groupon team, now 6,700 strong across 15 countries — helped us achieve core strategic objectives and solid financial results in 2017, including our first-ever full year of GAAP profitability. As exciting as that is for our team, we expect that the most exciting aspects of our performance from 2017 will play out over many more years to come.

Local is an immense opportunity, one that only continues to grow as more small businesses seek to take advantage of the power offered by huge platforms to significantly grow income and impact. In this regard, Groupon has few peers. And yet Local remains in the early stages in terms of its migration online and towards increasingly connected commerce. Make no mistake however, that migration is underway, and we’re pushing hard to accelerate it.

The needs and desires here are clear and simple. Merchants want profitable customer relationships (and more of them), and they want help competing in the new world that seems determined to put them out of business. Consumers want online and mobile convenience and service when they’re shopping locally, and they want an easier way to discover and buy amazing things around them. In other words, consumers want to buy from small businesses, but they want small businesses to be able to play a level game with the biggest and best companies in the world in terms of service and convenience.

Our goal in 2018 is to accelerate delivering on the needs and desires of merchants and consumers in Local commerce. To extend the advantage we’ve built over the last nine years, we plan to continue making transformational tools for small businesses and delivering an amazing array of local deals, experiences and goods for customers. We believe we’re well positioned to deliver: we’re running leaner and more efficiently than ever; we’re launching products that delight merchants and consumers alike, and we’re executing well across the business. Our last year demonstrated that focus, execution and a great team can continue to deliver excellent results while helping customers save and small businesses succeed, building vibrant neighborhoods in the process. We expect that to continue. Customer Experience As Groupon has evolved, it became clear that our product should evolve to match the changing expectations of consumers and merchants. In short, we’re making the process of using a Groupon frictionless — rewarding even — by removing the voucher from the equation and offering key convenience features like booking. Most important, the entire experience should take advantage of our best-in-class mobile app and be supported by a great customer service team.

Groupon+ is the tip of the spear for our customer experience efforts, and, while it is still early days, we clearly see the potential of frictionless experiences on our platform. Groupon+ completely removes the voucher from the equation by linking discounts to the customer’s credit card. People pay as they usually do and seamlessly save on their purchases. For merchants, it’s similarly simple, requiring no training of staff, allowing them to offer a much wider range of discounts and encouraging customers to return again and again.

This is the first major product we’ve launched that has shown the potential to significantly change purchase frequency. Customers who use Groupon+ are more engaged, which means more savings for customers and more business for our merchants. It will be some time before Groupon+ makes up a material part of our business, but it’s showing how removing friction benefits both sides of our marketplace.

Arguably, the most exciting part of Groupon+ is the platform on which it’s built — a platform which seamlessly connects offers with a customer and payment instrument in real time, at scale, and which can power more products over time. As the first product built on this platform, Groupon+ is off to a great start.

Importantly, Groupon+ — as an anytime, anywhere product — is built for mobile, which is another core focus area for our customer experience efforts. Continuing to evolve our app to meet the demands of our changing marketplace is increasingly important as more and more customers show up with higher intent and find more and more inventory. Further, we expect our mobile efforts to be even more impactful using our proprietary data, machine learning and AI to improve relevance, discovery and service on our platform.

Booking is another key part of improving the customer experience. It also lends itself to an increasingly mobile world. In 2017, we helped millions of customers make reservations and appointments through our beauty booking experience, our International restaurant reservations offering, and third party booking integrations.

We’ve seen that when customers can purchase and book simultaneously, we can increase customer satisfaction while driving even more traffic to merchants. Our opportunity now is to further scale bookability on the platform in 2018, both by expanding our proprietary tools, and via third party integrations, where Groupon’s unique combination of local customer transaction scale and brand trust create compelling partnership opportunities. Our focus on the customer experience is now a part of Groupon’s DNA. It’s something we begin and end with, believing that when it’s simple and rewarding to use Groupon, we will attract more customers and make them users for life.

Open Platform

In 2017 we also made great strides in establishing Groupon as a true platform. Groupon is already the largest local marketplace of its kind where we operate, and more and more potential partners are realizing the opportunity that nearly 50 million ready-to-buy customers represents. Solidifying our position as a platform requires opening Groupon to more high-quality third parties, as well as distributing our offers to customers through other great partners. We intend to drive forward on both of these fronts in 2018.

In terms of partnerships, Live Nation, Expedia, Viator, Goldstar and FanXchange are now active parts of our marketplace. Our GrubHub integration will bring tens of thousands of new food delivery offers to Groupon. We’ve also recently completed a partnership with ParkWhiz and signed an agreement with American Express as a network partner for Groupon+, giving us the three largest payment networks in North America along with Visa and MasterCard. These are great companies with great, national brands. Their presence on our platform should be proof positive that the Groupon marketplace is a compelling destination. We see no shortage of potential partners and expect to bring more great relationships to customers as we move through the year.

In terms of distribution, we believe our offers can enhance the value propositions of other established programs. We’ve worked closely with distributors like Button and OnStar, and we’ve launched an airlines reward program that helps users earn airline miles and hotel points for shopping on Groupon. We expect more of these types of relationships to launch over the course of the year and further expand our platform reach.

This two-way flow of deals and customers creates real benefits for our marketplace by maximizing the transactional power of our platform and placing our deals on other high-traffic destinations to bring more people to Groupon.

International Potential

Over the last few years, we’ve worked hard to reposition our International business for success and believe continuing to unlock the potential in International is a significant growth opportunity. To put the opportunity into context, our International markets today make up about half of our North America gross profit yet those markets are about twice as large as North America in terms of addressable population while representing similar buying power and mobile adoption.

To help unlock our international opportunity, we’ll maintain focus on our proven product, marketing and supply strategies that we’ve honed in North America. On the product side, we plan to focus on mobile by improving the overall usability of the app with a better checkout experience, a shopping cart and other winning features. For supply, we’ll remain focused on growing local merchant relationships in the largest cities, as well as pursuing more high quality national and third-party offers. We also intend to expand our coupons business internationally, which builds on the investments we’ve made in North America, while bringing another highvalue, everyday offering to our international customers.

Given the progress of the International business, we also believe it’s time to expand our International marketing programs. In 2018 we expect to step up our overall investment in targeted cities and mirror North America’s successful offline strategy. We plan to continue to invest in the same 12- to 18-month payback window, and believe our enhanced analytics will bring even more rigor to our marketing programs.

Operational Efficiency

One of the core challenges to operating a global marketplace at scale is doing it efficiently. As Groupon has transitioned from hyper growth to profitable growth, we’ve devoted considerable energy to ensuring our operations are lean, effective and provide leverage to invest in the future of the business while continuing to thrill customers and merchants. Over the last year, we continued to expand our Shared Service Centers and Engineering Development Centers to better realize the advantages inherent in being a global company with the ability to tap into a diverse and broad talent pool to help us build amazing products and provide great support to our customers and merchants around the world.

We’ve also made significant strides in our general operations, becoming more efficient in our sales processes, our customer and merchant support and our overall staffing. Now, more than ever, we are a lean and effective organization while still delivering — and improving upon — the experience our customers have come to expect from Groupon.

The Road Ahead

These four strategic areas continue to be our focus in 2018. We have real work to do on all fronts, but we’re on a solid track, and we’re working off a more efficient and sustainable cost structure. The opportunity in front of us is clear, and we’re incredibly excited to attack it over the coming years.

As we move deeper into 2018, we are energized and excited by the opportunities ahead. Our focus on the customer remains a true North Star, and we continue to make great progress toward a frictionless, voucherless experience. Our platform is growing, and we’re adding capabilities and merchants to it every day. Our international business is beginning to show it’s long-term potential. And, we’ve never been more operationally efficient.

When all of these things work in concert, we should begin realizing the power of the platform we’ve created and what we believe can be significant customer and stockholder value that cements Groupon at the forefront of local commerce.

I’d like to thank the Groupon team for a strong 2017, and for their continued passion to do amazing things for our customers, merchants and stockholders. That energy and drive is at the core of our current and future success, and I’m excited about what we’ll accomplish together.

This letter contains forward looking statements. Groupon’s 2017 Annual Report includes a message on the use of forward looking statements and is available at http://investor.groupon.com/financial-information/annual-reports.

Diversity at Groupon – 2017

2017 Diversity Update

In the time since releasing our first diversity disclosure the conversation around diversity and inclusion in the workplace has continued to expand, gaining traction and allies. At Groupon, we think that’s a great thing. More discussion and attention on these topics helps keep an important issue top of mind, keeps advocates engaged and brings good ideas to the forefront.

More good ideas are important, because making broad, systemic diversity improvements is a long-term proposition, and the more smart people who are thinking critically and creatively about the issue, the quicker we’ll see real progress.

We continue to focus on diversity because of the broad value it brings to our business. We believe diverse faces, backgrounds and experiences bring diverse perspectives — perspectives that help reflect the wants and needs of the millions of customers and businesses we serve. We find a focus on diversity helps embed respect and inclusion into the core of our company culture. As a global company, we see the benefits of diversity all across our teams and operations.

Over the past year-plus, we’ve made some exciting progress. And, we’ve had a few areas where we’re not seeing improvements as quickly as we’d like. All told, however, we believe we’re focused on the right things and are committed to driving them throughout the organization in a scalable and sustainable way.

Specifically, we remain focused on attracting talent from diverse communities, building leader capability to drive inclusion and diversity awareness and thinking throughout the company, continuing to support STEM education and women in tech and remaining thoughtful about how we develop and retain talent at all levels.

With that, let’s look at the numbers:


Some key wins and takeaways:

  • Solid progress on Women in Leadership and Women in Tech

    This was, and continues to be, a focus area for us. We saw good traction from implementing Diverse Slates for all leadership roles, but it’s also worth noting that many of our new diverse leaders are the result of internal promotions, indicating success in developing and retaining diverse talent, in addition to hiring it. We’ve also found our STEM efforts to be incredibly popular for our employee volunteers and meaningful motivators for our Tech teams looking to give back and help develop the future pipeline of diverse talent.

  • Embedding diversity across the organization drives awareness and adoption

    Over the last year we partnered with Paradigm to develop and rollout Unconscious Bias training across the company. To date, more than 80 percent of global leaders and more than 65 percent of people managers have participated in either in-person or e-learning training, and the effort is still ongoing. We also partnered with one of our merchants, Second City, where employees practiced inclusive behaviors through improv techniques and learned what they can do to make inclusion a daily habit.

  • Accountability matters

    Just as our senior leaders are accountable for business results, we’ve also made them accountable for improving the diversity of their teams. All senior leaders have specific diversity targets that are a part of their total compensation equation. We’ve found it keeps the issue top-of-mind and tightly integrates our leaders into our recruiting and retention programs.

  • Everyone owns culture

    Just as we believe that everyone “owns the customer experience,” we’re making the same thing true for culture and ensuring there is a true shared accountability at all levels of the company to emphasize and live our value of Respect, Integrity and Inclusion. Our goal is to have that value cascade through everything at Groupon and make us a top destination for all forms of talent thanks to the environment we’ve built and the people who work here.

These focus areas and programs are a strong base from which to build, and while improving diversity overall is a long-term proposition, we believe these are the right places to focus our resources and energy. There’s clearly more work to do, but by approaching diversity as core to our overall culture and identity, rather than simply as a set of initiatives, we’re setting the stage for continued improvements and a better Groupon for everyone.


Groupon Employees Volunteered More than 5,300 Hours Last Month in Their Local Communities

Groupon recently unveiled the results of its fourth annual global employee Volunteer-a-thon, a company-wide initiative that encourages community involvement during the month of June and throughout the entire year. This year’s event resulted in 1,565 employees volunteering more than 5,300 hours for 77 nonprofit partners and serving 57 communities around the world.

“We’re such big believers in building great communities that we made it one of our company values,” said Jay Klauminzer, vice president of local deals and executive sponsor Groupon’s employee volunteer program. “We’re thrilled that Grouponers are making a global difference by giving back to the organizations that are improving their neighborhoods on a daily basis.”

Highlights of the 2017 Groupon Employee Volunteer-a-thon’s 90 events included:

  • Chicago: Worked with local Groupon merchant and nonprofit partner, Shedd Aquarium, to bring together 100 employees for a beach cleanup and habitat restoration on the shoreline of Lake Michigan
  • Palo Alto, Calif. and Seattle: Partnered with local food banks, Second Harvest Food Bank and Food Lifeline, to sort and repackage rescued food
  • Warsaw, Poland: Hosted a holiday picnic–including yard games and karaoke–at the House of Single Mothers and Children
  • Bangalore, India: Visited the Diya Foundation and helped individuals with disabilities practice important social and emotional skills through a variety of activities and games

Throughout the month, Groupon teams competed to be the most involved in their local communities, with the winners––one North American team and one international team––getting the opportunity to award $5,000 to the charity of their choice, as well as sport this one-of-kind Groupon Volunteer-a-thon jacket.

vat jacket_legal

With nearly 100 percent of their teams participating, the 2017 Volunteer-a-thon winners were the Groupon Chicago Legal team and the Groupon Australia office. Some of the volunteer projects completed by these teams included:

  • Australia: Spent a full day at RSPCA working with animals and helping out with different maintenance projects around the facility
  • Chicago Legal: Worked at Cradles to Crayons’ Giving Factory to assemble bags of clothes and other important essentials for deserving children

Groupon employees are on pace to top last year’s total of 13,000 hours volunteered in their local communities.

Suns Out, Phones Out? Groupon Survey Finds Families Will Spend More Than One-Third of Summer On Their Devices

With the upcoming Memorial Day weekend and the school year winding down to a close, we asked 1,000 parents how much time their families plan to spend on their electronic devices this summer––and the results were staggering. The average American family will spend more than one-third of summer, which is the equivalent of 35 days, using their electronic devices. The survey also found that the average child will watch an estimated 60 movies and play 150 hours of video games over the summer months.

“We love technology, but we also think it should be in the service of something we love even more, which is spending time with our families and experiencing the compelling local activities offered during the summer months and throughout the year,” said Greg Rudin, head of Fun Things To Do at Groupon. “As parents, we’re often just as guilty as our kids when it comes to screen time, which is why it’s important for the entire family to put down our devices every once in awhile and go make some memories together.”

When asked how too much screen time affected their children, 77 percent of parents said screen exposure influenced their child’s mood, 62 percent said they face regular battles to get their children to put down their device and almost half said too much screen time impacts their sleep. And their children weren’t the only ones impacted by too much screen time, parents said they feel like they personally waste one of out every four weekends per month and throw away 9 non-working days over the summer due to their own inactivity.

Parents were asked the top five ways that families can make sure they get the most out of their summer without being consumed by their electronics, and they identified the following:

  1. Hitting the beach
  2. Attending a BBQ
  3. Going on a road trip
  4. Visiting a zoo
  5. Going to a water park

But according to parents, ditching the technology and spending more time with the kids over the summer months won’t come cheap. The survey asked parents to imagine their perfect family weekend and found Moms and Dads estimating it would cost $2,328. Parents said they would spend $1,465 on travel, lodging, taxis and fuel––with an additional $510 spent on admissions and tickets to attractions and evening entertainment. Parents also estimate that they’ll spend $353 on meals during the perfect family weekend.

For those families looking to have the perfect weekend on just about any budget, Groupon’s amazing collection of things to do deals offers a number of savings opportunities on top summer activities, including family activities, tickets and events, outdoor fun and top deals of the week. To view the entire collection, please visit https://www.groupon.com/local/things-to-do.


Groupon Celebrates National Small Business Week

Groupon Celebrates National Small Business Week by Revealing the Top 10 Best Cities for Local Businesses

It’s National Small Business Week, which is a great time to celebrate the impact local businesses, owners and employees have on our daily lives. According to the U.S. Small Business Administration, there are more than 28 million small businesses in the United States––accounting for two out every three new jobs created. Whether it’s for generating economic growth and job creation or defining the unique and distinct character of our neighborhoods, this week is the perfect time for us to show how much we love these businesses, the communities they foster and the experiences they deliver.

Since we’ve worked with well over one million local merchants and generated more than $13 billion for these businesses, we decided to take a look at our sales data to see which cities were the best places for small businesses. The top 10 best cities for small businesses––meaning they sold the most local Groupons as a percentage of subscribers––are:

As the world’s largest small business ecommerce marketplace––90 percent of Groupon merchants have 20 or fewer employees and almost one-third are sole proprietors––local merchants are at the center of everything we do here at Groupon. Connecting customers with the millions of small businesses around the world––and helping build vibrant and growing communities in the process––is our core focus as a company. So whether it’s your favorite local pizza place, a relaxing spa or something fun to do on a Friday night, take a few moments this week to tell the small businesses in your community and their employees just how much they mean to you.

For more information on National Small Business Week, please visit https://www.sba.gov/nsbw/nsbw.

Groupon Celebrates National Small Business Week by Revealing the Top 10 Friendliest Cities for Local Businesses

2016 Letter to Stockholders

In 2016, Groupon made some of its most significant strides as a public company as we continued to make progress on our path to becoming the daily habit in local commerce.

Local continues to be a vast opportunity. Connecting customers with millions of small businesses around the world — and helping build vibrant and growing communities in the process — continues to be our focus. Few others have the scale or ability to tackle this challenge, and no one has made as much progress in such a short time.

Since inception, Groupon has generated more than $13 billion with well over one million local businesses, and more than 50 million customers continue to trust Groupon to deliver incredible value on the things they do everyday and that make their neighborhoods great.

This is a mission that our more than 7,000 employees around the world take to heart and where we continue to do amazing work.

2016 was also a year of significant transition for Groupon.

Having built one of the largest marketplaces in ecommerce over the past eight years, our overall progress is clear. And, as exciting as that progress has been, I believe we still haven’t realized our full potential. We’ve often simply tried to tackle too many things in this vast space. It’s understandable: when you are pursuing an opportunity like local in real time with no tested blueprint, the potential for distraction is real and significant. Moving into 2016, it was clear that our business needed more focus.

When I took the role of CEO, I set out to bring focus to the business and team; to channel our collective energy and unleash it on four foundational things: streamline and simplify our business, grow customers, reduce empty calories and improve the overall customer experience. We believe these are the core elements to building a thriving business for the long term, and the team produced great results.

In short, we did exactly what we said we’d do. And we exited the year with double-digit North America local billings and — more importantly — gross profit growth.

Streamline and Simplify
Streamline and Simplify

Most significantly, we fundamentally changed how and where we do business. Over time, Groupon had sprawled and the business became increasingly complex. At the beginning of 2015, we operated in 47 countries. This effectively meant running more than 40 companies — companies with their own sales, customer service, finance, operations and editorial teams. Bottom line, we were fighting too many tough battles that weren’t critical to our long-term success.

Over the last 14 months, we challenged our teams to simplify our business and to ensure we were only working in markets where we were poised to win and where we believe there would be strong return on our long term investments. That meant big changes to our operations, as well as our geographic footprint.

After a year of tough decisions and significant restructuring work, our global footprint sits at 15 countries. These are the markets where we believe we can continue to grow great businesses and that will benefit most from our products, scale and expertise.

As we trimmed our global footprint, we also expanded regional and global shared service centers to more efficiently provide core operations and service support for consumers and merchants around the world. These shared service centers are another key way we’re further streamlining our operations and making the business simpler to run while delivering a more consistent experience for customers. It’s also a much more efficient operating model, which is visible in the strong trend of cost improvements we’ve delivered since undertaking these efforts.

We will continue to focus on this area going forward. Running a lean and tight business is now part of our DNA.

Grow Customers
Grow Customers

We also made outstanding progress in growing customers. Groupon has built an incredible brand — one consumers recognize and embrace. It is a tremendous asset. We are also operating in a massive and underserved market where customer scale is critical and where we already have a strong foundation. In 2016, we invested more than $360 million in marketing to truly capitalize on our brand and extend our customer advantage. Over the course of the year, we added more than five million new customers in North America — our most since 2012. In addition, we acquired LivingSocial — one of our original competitors in local — to give us a further way to connect with customers through another strong brand.

As an extension of these efforts, we also launched our first significant offline advertising campaign since 2011 to reacquaint customers with Groupon while demonstrating how the company has evolved from our daily deal roots. Combined with our traditionally strong computational marketing efforts, we were able to effectively and efficiently drive millions of profitable new customers to our marketplace and further bolster our brand.

Expect more great things on this front as we move forward.

Reduce Empty Calories
Reduce Empty Calories

Another key focus for 2016 was reducing empty calories — particularly in our Goods business. As we’ve increasingly focused on gross profit as the best indicator of the overall health of our marketplace, we needed to pay particular attention to our margins. While this is something we track for all our businesses, it is especially important in Goods. Over the past 5 years, our Goods business has been a powerful tool for customer engagement, activation and retention. However, Goods was also too reliant on low margin products that are good for revenue, but contribute little to the bottom line. We are focused on sustained gross profit growth and long-term customer value, and we believe we’re building our businesses to reflect that.

In 2016, we made solid progress ensuring that our Goods operation is a healthy part of Groupon. With improved margins, Goods helped us deliver 10% more incremental gross profit in North America year over year. Further, even as we’ve removed those empty calories, Goods continues to be a tremendous source of Local customer activation, with roughly 40% of Goods buyers also purchasing a Local deal.

As we enter 2017, we believe Goods is healthier, and we’re using it more strategically to fuel long-term marketplace growth.

Improve the Customer Experience
Improve the Customer Experience

Even with a strong brand, amazing local merchants and tens of millions of loyal buyers, the customer experience remains king. Your product has to deliver value, but it also needs to be easy and rewarding to use. Then you have to back it with excellent service and support.

During the course of the year we made real improvements in our customer service levels driving them to industry standards with plans for further gains. We continued to deliver category-leading customer satisfaction ratings and boast a Net Promoter Score of 72 that rates alongside the world’s best brands. This is an excellent foundation from which to build.

We also invested significantly in our mobile experience. Groupon is the top rated retail app in the United States according to Applause and the second most visited retail app in the country — behind only Amazon — according to Comscore. Our app has more than 145 million mobile downloads and more than 60 percent of our transactions occur on a mobile device. We are — and have been — a mobile-first company. It’s now clear that we’re also a leading mobile shopping destination.

At the end of the year we launched a dramatically improved app experience to build on our already-strong mobile history and deliver more of what consumers want. It is as much as 40 percent faster with vastly improved mapping and geolocation, filters, and browse features that make it even easier to find the perfect deal, wherever you are.

We also began attacking one of the biggest friction points at Groupon: voucher expiration. This has been a thorn in customers’ sides since Groupon’s inception. When vouchers expire, no one wins. Customers feel like they’ve lost out on a great deal. Merchants miss out on a new customer. Our new trade-in program allows customers to extend the expiration date of their deals or trade in a recently expired deal for a new one. We believe this is another key investment in a healthy marketplace.

These were all important improvements in the customer experience, but the reality is that our work here is never done. I expect even more gains here in 2017.

The year ahead
The year ahead

Our progress in 2016 is due to our focus. We set out four key priorities and spent the year relentlessly driving toward them. But there is still work to do. Winning in local isn’t a one year proposition. There’s a reason it is one of the last spaces to be disrupted. It takes time, resources and a great team with a true passion for helping consumers get the most out of their daily lives and for helping small businesses thrive.

Moving forward, we will use what worked for us in 2016 as a foundation for continued progress and refinement. In 2017, we will continue to focus on making the business simpler to run, on making Groupon easier for customers to use and merchants to work with, on continuing to increase our customer base and how frequently they engage with us.

We will make ease and elegance a key priority in our products as we build toward a truly voucherless future. That’s right: Groupon with no physical coupons. At the same time, we plan to make our platform even more powerful for merchants with flexible discounts and even market rate inventory alongside our traditional deals. The combination should mean a seamless and frictionless experience where nearly 50 million customers always find what they’re looking for.

Long term success
Long term success

I’m often asked what long-term success looks like for Groupon. Ultimately, I see success as a world full of amazing neighborhoods built on amazing merchants — vibrant places where people eat, shop and — most importantly — connect. How do we do that? First, we have to ensure Groupon remains a great place to work with amazing people helping us tackle this incredible opportunity. We then need to remain focused on delivering against our strategy, which is helping us move step-by-step to being a daily habit for customers and an indispensable asset for businesses.

When we do all that, we’ll also have built a great company. I feel incredibly fortunate to be able to share this incredible journey with all of you, our valued stockholders, customers and employees.

We are as excited to play a part in that as we were eight years ago and excited to be even further along the path.

This letter contains forward looking statements. Groupon’s 2016 Annual Report includes a message on the use of forward looking statements and is available at http://investor.groupon.com/annuals-proxies.cfm.

New Groupon Survey Finds 60 Percent of Americans Plan to Start a Personal ‘Spring Cleaning’ Makeover as the Weather Changes

  • Men plan to spend 35 percent more than women for their makeover with an average planned spend of $198 vs. $146 for women
  • Americans plan to spend twenty minutes extra each day in the spring on beauty routines compared to the winter months
  • People are three times more likely to start a new diet or fitness regime in the spring
  • Buying new clothes, sporting a new haircut, making diet improvements, going to the gym and getting a pedicure were identified as the top ways to spruce up for spring

With the weather in many parts of the country this week feeling more like January than the last week of winter, we decided to spring forward by asking 2,000 Americans about the different levels of effort they put into feeling and looking their best during the winter and spring months. And according to the results, 60 percent of Americans are planning to do a personal ‘spring cleaning’ makeover as the weather changes. The survey conducted in recognition of Groupon’s spring beauty Out to Wow! collection––running from March 15-17––revealed that women are more likely to do a personal spring cleaning makeover than men, but men plan to spend 35 percent more than women ($198 vs. $146).

Participants also said that they plan to spend an extra 20 minutes each day in the spring on their personal beauty routines and are three times more likely to begin a new diet or fitness regime. Buying new clothes, sporting a new haircut, making diet improvements, going to the gym and getting a pedicure were identified as the top ways people spruce themselves up in the spring.

“It’s not surprising to see that so many people want to get a fresh start on feeling and looking their best now that winter is coming to a close,” said Silvija Martincevic, vice president and general manager of health, beauty and wellness, Groupon. “‘Me time’ tends to take a back seat in cold weather, which is why we typically see big increases in people buying services such as massages, mani-pedis, facials, laser hair removal, haircare and other wellness- and beauty-related services during the first week of spring.”

The survey, conducted by market researchers, OnePoll, and commissioned by Groupon found colder weather prompts nearly two-thirds of Americans to take a break from worrying about their image, with 51 percent saying the shorter days leave them with less energy to focus on taking care of themselves.

Thirty percent of respondents confess they put less effort into how they dress over the winter, and that might be why one in six say they’ve donned sweatpants with food stains at some point. Understandably, 55 percent of women admit they’re quite happy to shave their legs less regularly, while skincare routines, haircuts and other grooming rituals are also less frequent––with more than half saying they’ve grown hair in places they normally wouldn’t.

And if you’ve added a few pounds, then you’re not alone – nearly two-thirds of Americans have put on a little weight over the winter, with the average gain estimated at eight pounds.

Americans are most likely to start their personal spring cleaning makeover between March 6 and April 5, when four out of 10 report a spike in confidence due to the warmer weather.

Through its Out to Wow collection, Groupon is offering a number of ways for people to begin and save money on their spring revitalization at well-known places such as the following:

Out to Wow! offers users extra savings throughout the three days of the collection. Today only, users can find up to 80 percent off facials, massages, nail/hair care and more. Tomorrow, users will receive an EXTRA 25 percent off all health, beauty and wellness deals in the collection. On Friday, Groupon is running a ‘buy more, save more’ promotion, saving customers more money the more they personally spring clean, including $10 off $40, $20 off $75, $30 off $100 and $50 off $150.

To view the entire Out to Wow! collection, please visit https://www.groupon.com/occasion/out-to-wow-beauty.


Out with the Old, In the with the New: Begin the New Year with Something You Won’t Regret

With 2016 coming to a close, we thought it would be interesting to take our annual look at a popular service sold through Groupon that truly signifies “out with the old, in with the new” –– tattoo removal.

According to the results of an online survey released earlier this year and conducted by Harris Poll, the number of people who are getting tattoos is increasing, but so are the number of people who are having regrets about their ink. The percentage of Americans with at least one tattoo increased from 21% four years to ago to 29% today. With more people getting tattoos, the number of people who regretted their tattoos also grew from 14% to about one of out every four people.

We looked at Groupon tattoo removal purchases from the past year, and we found that Austin, Texas once again topped the list of cities that got the most ink expunged. Following Austin was Lexington, Kent., Oklahoma City, Tulsa, Okla., Louisville, Kent., Phoenix, Houston, Providence, R.I., Salt Lake City and Atlanta.

Some of most commonly removed tattoos include: name tattoos, dolphins, misspelled words, barbed wire, stars, butterflies Chinese characters, Celtic designs, signs of the Zodiac and fairies.

Top Tattoo Removal Cities

  1. Austin
  2. Lexington
  3. Oklahoma City
  4. Tulsa
  5. Louisville
  6. Phoenix
  7. Houston
  8. Providence
  9. Salt Lake City
  10. Atlanta

If you’re interested in a resolution that you’re guaranteed not to regret this New Year’s, then Groupon has a number of great money-saving ways for you to get in shape, relax, learn a new skill or try something new.

And finally, since most people still have no regrets about their tattoos (including the author of this post), we decided to also take a look at which cities bought the most Groupon tattoo deals.

Baltimore beat out last year’s number one, which was San Antonio, to top the list. Following San Antonio was Las Vegas, Jacksonville, Fla., Seattle, Milwaukee, Albuquerque, N.M., Minneapolis/St. Paul, Denver and Pittsburgh.

Top Tattoo Cities

  1. Baltimore
  2. San Antonio
  3. Las Vegas
  4. Jacksonville
  5. Seattle
  6. Milwaukee
  7. Albuquerque
  8. Minneapolis/St. Paul
  9. Denver
  10. Pittsburgh


Groupon Welcomes Girls Who Code

GWC x Groupon

The day has come where we welcome twenty of the best and brightest rising high school juniors and seniors from Washington, Idaho, Kentucky, and Arizona for seven weeks of coding and mentoring through the Girls Who Code Summer Immersion Program!

The girls will spend the next seven weeks in our beautiful Seattle office receiving an intensive intro to coding concepts through languages such as Scratch, Python, C\C++, HTML, CSS, and JavaScript and fun applications like video games, robotics, and web development.

Participants will also have the opportunity to learn from some of our very own. We’ve matched students with female employees so they can be mentored by other strong women in technology. Additionally, the girls will have the chance to hear from Grouponers in a speaker series covering a wide array of topics such as life as a developer at Groupon, empowering women in technology, and the concept of regular expression patterns.

And because they don’t have enough to do, the girls will apply what they’ve learned and build something of their very own as part of a team project. Projects that have come out of past summer immersion programs include Tampon Run, a video game to take the taboos out of menstruation, and jackALERT, a jacket that lights up when one feels like they are in a potentially harmful situation.

The culmination of all the girls’ hard work will be presented in a graduation ceremony hosted on Thursday, August 11th at the Seattle Public Library. We invite all Groupon employees, friends of the program, and lovers of technology to join us as these new Girls Who Code alumnae share their projects with the world!

Groupon’s partnership with Girls Who Code is part of our larger commitment to STEM education and closing the gender gap in the engineering and technology industry. Led by the Social Responsibility and Talent Development teams, this is Groupon’s 2nd year partnering with GWC. You can read all about last year’s program — hosted in Chicago — and see for yourself what an amazing opportunity this program is for the girls and the volunteers alike.

Groupon’s partnership with Girls Who Code is part of our larger commitment to STEM education and closing the gender gap in the engineering and technology industry. Led by the Social Responsibility and Talent Development teams, this is Groupon’s 2nd year partnering with GWC. You can read all about last year’s program — hosted in Chicago — and see for yourself what an amazing opportunity this program is for the girls and the volunteers alike.


Diversity at Groupon

Diversity continues to be a hot topic in the tech community.

And for good reason: most tech companies want more diverse employee populations.
Groupon is no different.

We’re pushing hard to increase employee diversity at Groupon and have made solid advances over the past year.

Today, I want to update both our diversity statistics, as well as the programs we have in place to continue the momentum we’ve seen since our last report.

First, though, let’s take a step back and talk about why we think increasing diversity in the workforce is important. Some talk about diversity as if its value is self-evident. But that sells the topic short.

There’s value to the larger conversation when companies talk about diversity in terms of leverage — e.g., how and why diverse communities can be a force multiplier for their businesses. And there’s value to the larger conversation when we’re more expansive with the definition of diversity: race and gender diversity are important pillars, but so too are veteran status, sexual orientation, age, disability, religion, nationality and parental status, among others.

Here are just a few of the reasons we’re focused on diversity:

Groupon’s merchants and customers are a melting pot of countries, cultures, backgrounds and upbringings. Having a diverse workforce helps us better relate to and serve those perspectives. It allows us to step beyond just being a customer-focused company; a diverse workforce gives us the opportunity to truly connect with our customers and the communities in which they live.

How that plays inside the company day-to-day is that diversity brings viewpoints and ideas to the front that may not have otherwise been considered and that can accelerate innovation. A more diverse workforce can bring a different kind of idea to the table, and that can net more good ideas and more great things for our customers.

Even with work to do, we see the benefits of diversity in product design, in user experience and in our sales calls at Groupon. This matters for our culture and our business. It’s not some box ticking initiative… we’ve learned from other areas of our business that bolting on foundational elements doesn’t work. We’re making progress because we’re continually integrating diversity into all parts of our organization — from hiring, to training, to retention, to career development, to reporting.

All that said, here are Groupon’s updated diversity statistics. We know there is room to grow, but we are making progress thanks to the commitment and the work we’ve done to make this a core part of our business.

Let’s dig in:

Global Diversity | March 2016

Global Gender

Male 53.38%

Female 46.62%


Male 84.25%

Female 15.75%


Male 83.9%

Female 16.1%


Male 48.97%

Female 51.03%

US Diversity | March 2016

US Ethnicity




Overall Diversity

Women in Leadership
Global Numbers

Net + 54%

Women in Leadership
Global Percentage

Net + 19.2%

Women in Technology
Global Percentage

Net + 13%

Overall Ethnic Diversity | US

Net + 57%

Black and Hispanic/Latino Diversity | US

Net + 62%

What we’ve done isn’t as important as what we’re doing. To that end, here are a few of our key focus areas:

  • Continue to expand our sourcing efforts with diverse communities

    We are focused on establishing stronger relationships with diversity networks, organizations and schools. Many talk about a “diversity pipeline” issue, but we think that’s only a challenge if you artificially constrain where you look.

  • Enhance leader capability

    While diversity works best as a core value that’s spread throughout an organization, there’s no denying that leaders play a key role in the success of diversity initiatives. Equipping leaders to champion diversity efforts begins with helping them understand potential institutional and personal barriers. To that end, we’re working with Paradigm on training for managers across all our functions to raise our cultural awareness and remove potential barriers to inclusion.

  • Continue to support STEM education and women in Tech

    We’ve established strong partnerships with great organizations like Girls Who Code, Grace Hopper and Chi Ladies Hack. In some cases, these have a longer-term focus on developing future generations of diverse talent, but — in all cases — they’re deserving groups we’re excited to work with.

  • Maximize the role of our Employee Resource Groups

    Our ERGs — Women@Groupon, Blacks In Groupon, Parents@Groupon, Pride@Groupon, and Veterans For Groupon — are passionate cultural ambassadors both inside and outside of Groupon. We want to help these groups be even more effective in recruiting and retaining talent, as well as in telling the Groupon story.

  • Remain thoughtful about how we select, develop and retain talent

    This one is pretty simple. We’re enhancing our Human Resources tools and practices to ensure that we nurture talent across the company and that we provide meaningful careers for everyone — including our diverse populations.

We haven’t cracked the code on growing diversity at Groupon, but we’re working on it, and — most importantly — we’re making progress. Hopefully, our path is one that others find useful.–RW–