OpenTable is making its way into the increasingly crowded party for group buying, testing a discount program that offers deals similar to those of Groupon, Restaurant.com and DealOn.
A report in the San Francisco Business Journal, confirmed by OpenTable, said the online-reservation service is testing a pilot program in New York and Boston, in which users can purchase discounts on Wednesdays for certain restaurants. So far, participating restaurants in the Spotlight program include Gordon Ramsay at The London and I Trulli in New York, as well as Om Restaurant and Ginger Park in Boston.
OpenTable’s Spotlight deal debuted Wednesday in Atlanta at Craft, one of the restaurants in celebrity chef Tom Colicchio's portfolio.
Like some of the most popular offers at Groupon and Restaurant.com, OpenTable’s Spotlight allows customers to purchase a $50 gift certificate for $25. Published reports said the offer of 500 such certificates at Gordon Ramsay in New York sold out, while redemptions for other Spotlight offers have steadily increased.
OpenTable’s foray into group buying has it competing not only with established players in the space like Groupon and Restaurant.com, which signed up Shula’s 347 Grill in Jacksonville, Fla., as its 15,000th restaurant last month, but also with Blackboard Eats and upstarts like iDineDaily Deals, TipCity and Foodie.
Another group-buying offer with the reach and cache of a company like OpenTable is Zagat Exclusives, a partnership between DealOn Media and Zagat Survey set to launch this month in New York City. Like DealOn, Zagat Exclusives will offer limited-time discounts for restaurants at a fixed price, which drops the more people buy the deal. At the end of the sale period, all purchasers are charged the lowest price.
Groupon is focused on differentiating itself through its new Personalized Deal service, where users can enter demographic information and their addresses to find deals closest to where they live, rather than the blanket deal offered to a whole city.
“Customers are excited by the idea of saving money and doing something fun, but we didn’t always serve their area before,” said Julie Mossler, spokeswoman for Groupon. “We can do different deals now, even though two people are living in the same city. We also can further reach suburban areas, maybe some rural areas, and not alienate our urban customer base.”
And while new players enter the group-buying space all the time with similar discounts, Mossler added, Groupon tries to set itself apart with customer service aspects.
“We have a no-questions-asked return policy,” she said. “If the experience you bought wasn’t what you thought it was going to be, you can contact us for a full refund. That gives people more license to experiment.”
Groupon also offers discussion boards for every deal, which is important to the merchants and Groupon’s customer service team because they can monitor every offer for problems. Customers use the boards to ask questions directly, such as “Can I use this offer at happy hour?” or “Does this deal include alcohol?”
“There’s no other form of marketing that is going to drive this many new customers to your restaurant,” Mossler said. “We don’t position Groupon as a fast way to make money overnight. That tends to attract the wrong kind of merchants, usually those in need of quick cash flow. We think it works best if you think of it as part of your long-term marketing budget. If you get thousands of new customers in one day, it’s up to you to make sure their experience is noteworthy.”
Contact Mark Brandau at [email protected].
