Groupon, the largest provider of online daily-deal coupons, plans to alert customers to nearby discounts using location data from the mobile-phone application Loopt.
Loopt's 5 million U.S. users will get alerts on their phones when they're close to participating merchants, the companies say. Financial terms weren't disclosed.
Groupon is expanding mobile offerings to help maintain its dominance over more than 480 other daily-deal sites. Last week the Chicago-based company released a new service called Groupon Now!, which lets users search for deals at different locations and times of day.
Targeting Groupon customers by their physical locations will help local merchants unload "perishable inventory," or products and services that may lack strong demand on certain days, says Sam Altman, co-founder and chief executive officer of Mountain View (Calif.)-based Loopt.
"If technology can help bring together customers that are getting discounts and local businesses that have perishable inventory, that's a win for everybody," Altman says. "The customer gets a discount and the merchant gets revenues that would otherwise be totally lost."
The U.S. daily-deals market—which offers discounts of as much as 90 percent at businesses such as restaurants, clothing stores, and nail salons—will grow to $3.93 billion in 2015, from $1.25 billion this year, according to a projection from BIA/Kelsey in March.
Earlier this month, Groupon announced a joint venture with Live Nation Entertainment to sell discounted concert tickets online.
MacMillan is a reporter for Bloomberg News and Bloomberg Businessweek in San Francisco.
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