While Wall Street focuses on Groupon's North American recovery and technical hiccups, a stealthy revolution is brewing in the heart of the company – one with the potential to transform its financial trajectory and redefine its place in the market. This revolution is not about fancy algorithms or sleek new apps, but about a simple, age-old concept: gifting.

Dusan Senkypl, Groupon's interim CEO, dropped a bombshell during the Q4 2023 earnings call: gift orders in December surged by a staggering 67% compared to 2022. This wasn't just a holiday anomaly. Compared to 2021, December gift orders still rose by 30%, showing a consistent upward trend. While these numbers are currently off a small base, they reveal a seismic shift in consumer behavior and a potentially untapped gold mine for Groupon.

This isn't just about selling more during the holidays. The data unveils a fascinating phenomenon – the rise of the "last-minute gifter." Demand for Groupon gifts peaks dramatically three weeks before Christmas, culminating in a frenzy the day before. This last-minute scramble, traditionally dominated by frantic gift card purchases, is where Groupon has a unique opportunity to shine.

Think about it. Instead of a generic gift card, Groupon offers the chance to give truly unique and memorable experiences – a cooking class, a spa day, tickets to a show. It's the perfect antidote to the impersonal gift card, providing a personalized touch that resonates with both giver and recipient.

This isn't just a hunch. Groupon's data shows that in some markets, gift orders already represent between 5% and 20% of total orders. Imagine the potential if this trend spreads across all of Groupon's markets, fueled by a strategic push towards gifting.

Senkypl is already on it. He highlighted plans to expand giftable offerings, curate deals specifically for gifting occasions, and leverage marketing to highlight Groupon's gifting potential. Imagine a world where Groupon becomes synonymous with "last-minute experiential gifting," a go-to destination for those seeking a personal touch beyond the traditional gift card.

But there's more. The success of Groupon's initial gifting push, despite operating on a clunky legacy platform, underscores the company's ability to execute quickly and capitalize on market opportunities. This agility, combined with a revitalized sales team and a new consumer front-end on the horizon, sets the stage for an explosive combination.

Hypothetical Growth of Gifting Revenue

Let's assume Groupon's revenue for 2024 hits the midpoint of their guidance, around $507 million. The table below shows the potential revenue generated by gifting, assuming it captures 10% and 20% of total revenue.

Source: Hypothetical calculation based on Groupon Q1 2024 Earnings Call guidance

North America Local & Travel Revenue Trend

Groupon's core business is showing signs of recovery in North America, as seen in the chart below. This positive trend is a key factor driving investor confidence.

Source: Extracted from Groupon Q1 2024 Earnings Call transcript

This is not to say that challenges don't exist. Groupon still needs to overcome its technical hurdles, optimize its merchant partnerships, and convince consumers that the new Groupon is a far cry from its discount-driven past.

But the success of its gifting initiative reveals a hidden potential, a powerful engine of growth that could propel Groupon beyond its current expectations. As consumers increasingly seek unique and memorable experiences, Groupon's ability to tap into the last-minute gifting market could be its secret weapon – a key to unlocking a future where experiences, not just discounts, define its success.

"Fun Fact: Did you know that the first Groupon ever sold was a deal for a pizzeria located in Groupon's hometown of Chicago? It's a reminder that the company's roots lie in local experiences, a foundation upon which its new gifting empire can be built."