Another key focus for 2016 was reducing empty calories — particularly in our Goods business. As we’ve increasingly focused on gross profit as the best indicator of the overall health of our marketplace, we needed to pay particular attention to our margins. While this is something we track for all our businesses, it is especially important in Goods. Over the past 5 years, our Goods business has been a powerful tool for customer engagement, activation and retention. However, Goods was also too reliant on low margin products that are good for revenue, but contribute little to the bottom line. We are focused on sustained gross profit growth and long-term customer value, and we believe we’re building our businesses to reflect that.
In 2016, we made solid progress ensuring that our Goods operation is a healthy part of Groupon. With improved margins, Goods helped us deliver 10% more incremental gross profit in North America year over year. Further, even as we’ve removed those empty calories, Goods continues to be a tremendous source of Local customer activation, with roughly 40% of Goods buyers also purchasing a Local deal.
As we enter 2017, we believe Goods is healthier, and we’re using it more strategically to fuel long-term marketplace growth.