Tricia Duryee

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Groupon Slashes Real-Time Deals on Friday to $1 in Chicago

Groupon is celebrating the launch of its new real-time deals service by discounting hundreds of deals in its hometown of Chicago to $1 for a 24-hour period on Friday.

The dollar menu will be the company’s largest promotion to date and will span hundreds of products and services across thousands of merchants.

The purpose of the promotion is to draw attention to the company’s new Groupon Now service, which allows people to find instant deals to restaurants and other services based on their location.

Groupon’s next biggest rival, LivingSocial, launched a similar service called LivingSocial Instant last month with a similar promotion in its hometown of Washington, D.C. Within a three-hour lunch period, LivingSocial said it sold 27,000 $1 vouchers.

Given that Groupon’s promotion will last for 24 hours and span many more product categories than meals, you’d expect the numbers to be even higher.

The deal will kick off at 6 am CT tomorrow, and the vouchers will be good only for that day. Users can download the Groupon mobile application, or enter a zip code on the Groupon Now landing page to browse offers. On the site, there’s a variety of categories, including “Eat Something,” “Have Fun,” “Go Shopping,” “Exercise,” “See a Show,” “Get Pampered” and more.

Presumably Groupon is footing the bill for this promotion and isn’t expecting retailers and restaurant owners to take the financial hit.

Groupon VP for Mobile Partnerships Michael Shim said at an event on Monday that he expects the service, which went live in Chicago last week, to be a huge source of future offerings. Already, he said, they have had more than 1,000 merchants sign up to offer real-time deals.

“Mobile is huge for Groupon,” he said. “I believe we could see us doing 50 percent of deals sold/purchased in the next couple of years.”

Before the real-time service launched, Groupon’s CEO Andrew Mason told All Things D’s Kara Swisher: “Until now, no one has had the assets to fix a merchant problem that was viciously subject to a chicken-and-egg situation.”

The expectation with instant deals is that merchants and restaurant owners will be able to better manage the flow of patrons, and invite them in for a discount when business is slow, rather than doing a traditional daily deal that attracts visitors at all times of the day and week, no matter what the merchant’s level of need might be.

Photo credit for dollar-menu art: krossbow