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Groupon Launches High-End Restaurant Reservation Service

'Reserve' is OpenTable competitor

Groupon today has launched an OpenTable-like feature called Groupon Reserve that lets consumers book restaurant tables at double-digit percentage discounts. The service will run via technology from Savored.com, which Groupon purchased for some $20 million last fall.

Groupon Reserve is live in Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, New York City, Philadelphia, San Francisco and Washington, D.C., offering deals from some of those cities' top-rated restaurants. By the end of 2013, the daily deals company will expand the service to more U.S. markets, as well as international cities.

Reserve lets consumers book a reservation with no monetary commitment and, in return, get 20 to 40 percent off the bill. Groupon Reserve charges the restaurant "a small, per-diner fee," Ben McKean, Groupon's general manager for the service (who also founded Savored.com), told Adweek. Conversely, Groupon has been splitting voucher sales with its often mom-and-pop restaurant partners, with the deals giant taking a 25 to 50 percent cut.

For Groupon Reserve consumers, McKean said, the discounts "might be 40 percent off on Sunday night, while it might be 30 percent on a Thursday night."

While heading three-year-old Savored.com before the Groupon purchase, McKean's firm partnered with OpenTable to run similar deals for 11 months during 2011 and 2012—but Savored.com-OpenTable customers were required to spend $10 to access the discounts.

Also, Reserve doesn't require pre-payments or vouchers as is the case with most regular Groupon deals. Eventually, McKean said the service will be tucked into Groupon's mobile app experiences for consumers and merchants alike.

"From the restaurant's perspective, they'll receive reservations through our merchant-facing mobile app," he added. "And then they know to apply the discount to the bill."

McKean said high-end eateries will be attracted to Reserve because its foot traffic data can inform them about the best days of the week to run certain discount deals.

The exec explained, "One of the big pitches to these merchants is, 'This isn't just about offering a deal or about getting a new customer. This is about leveraging an intelligent technology to increase profitability in your restaurant. And the reason we can do that is because of the amount of data we've [accrued].' That's something we are going to stay focused on for the next couple of years."

Groupon will initially lean on its massive email list to drive awareness for Reserve, though McKean suggested the service will likely be added to the deals firm's ongoing paid digital advertising programs.

"We're definitely tapping a number of different marketing channels to get the word out," he said.

Meanwhile, it's one of the first notable developments by Groupon under the leadership of CEO Eric Lefkosky, who replaced company founder Andrew Mason in late February. Lefkosky said in a statement, "As Groupon has evolved, we've seen growing demand from our customers for upscale offers and exclusive experiences."

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