LivingSocial Reveals Plans for Future Growth

LivingSocial is one of the pioneers of group buying on the Web, enticing consumers to unlock their daily deals by offering deep discounts on fashion to food and even vacation destinations. Now, the company is looking to move into mobile with its Instant Deals service. LivingSocial’s Maire Griffin provided PYMNTS.com with a preview of the new program.

PYMNTS.com: Before diving into the new Instant Deals service, in your view, how have group buying organizations like LivingSocial revolutionized eCommerce on the Internet?

MAIRE GRIFFIN: Our daily e-mail is a welcome sight in our members’ inboxes each day. In just a few clicks, they can purchase vouchers for real products and services. Vouchers can be redeemed beginning the very next day and sometimes don’t expire for up to 12 months. The LivingSocial mobile app is even more efficient, because it eliminates the need for a member to print out a hard copy of their voucher. Members who log in to the mobile app on their iPhone or Android device can view all of their LivingSocial purchases and simply display the voucher on their phone at the time of redemption. It’s like having a LivingSocial digital wallet of sorts — you don’t need to have anything on you except your smartphone to redeem.

There are revolutionary eCommerce implications for merchants as well. With typical advertisement channels, businesses are forced to pay money upfront for print costs and placement. With this method, there’s no guarantee in terms of an ROI and really no realistic way to track business to an online, print or broadcast advertisement.

When a merchant runs a deal with LivingSocial, she pays nothing up front and is able to track the number of redemptions for her deal through an online portal. Although not all deals are sold in the same quantity, in most cases, at the end of the redemption period, LivingSocial writes the merchant a check. Small businesses are able to take advantage of reaching new customers and creating repeat ones all with the help of LivingSocial. Even if members don’t purchase a particular deal, members are still exposed to a merchant’s name, website and address.

PYMNTS: For our readers who may not be familiar with LivingSocial, give us a little more background about the company. What sets LivingSocial apart from other group buying sites?

GRIFFIN: LivingSocial became the online source for hand-picked experiences at a value that you can share with friends in July 2009. Members enjoy at least 50 percent off on the coolest, hand-picked experiences, and local business owners get an easy and cost-effective marketing tool to attract new, loyal customers.

The company is based in Washington, DC, and the international brand has saved nearly 26 million subscribers more than half a billion dollars in more than 250 markets worldwide since our inception.

In 2010, we expanded our offerings to include:

– LivingSocial Escapes offers a collection of accessible and affordable and nearby “weekend-in-a-box” getaways each week;

– LivingSocial Adventures are fully produced events by LivingSocial that bring together multiple merchants offering members a unique curated event they wouldn’t have done or perhaps even known existed in their neighborhood; and

– LivingSocial Family Edition offers parents considerable cost savings (sometimes up to 90 percent) to local zoos, museums, day trips, aquariums, art classes, and more each Monday. It’s the perfect (and inexpensive) way for parents to discover their city with their tots or teens in tow.

PYMNTS: What was the inspiration behind LivingSocial’s Instant Deals initiative? What are the key differences between Instant Deals and the company’s existing coupon distribution model?   

GRIFFIN: Our focus is on meeting merchants’ varying business goals with our members’ demand for instant access. We know from working with our nearly 26 million members and merchants that the best way for both to interact in an efficient marketplace is to offer flexibility with the timing and the kinds of offers we provide.

Instant Deals brings a real-time twist to the way merchants market their business and how consumers discover the best experiences in their neighborhood. Local merchants can now work with LivingSocial to craft deals to optimize traffic through their doors during slower business hours or just when they want to bring in more customers. Unlike LivingSocial daily deals, which are live for 24 hours, Instant Deals are live for a short period of time, providing increased opportunity for businesses to enhance their customer base. For example, a lunch-driven restaurant can increase its sales during a slow afternoon by offering a special deal between 3 p.m. – 5 p.m. Members can share their Instant Deals through Facebook and Twitter just like they do their daily deals.

Instant Deals is currently testing in our Washington, D.C. market, but we hope to roll out this feature nationwide by the end of the year.

PYMNTS: Say I was an Instant Deals participant in D.C. How would I go about taking advantage of offers through Instant Deals?

GRIFFIN: By clicking on Instant Deals within the LivingSocial mobile application, members will receive notifications about Instant Deals within half a mile of their current location. In other words, you can literally step out of your office, pull up Instant Deals with our app and get a great deal right around the corner. Here’s a great video clip that demonstrates exactly how the feature works: LivingSocial Instant Deals Video

PYMNTS: To power Instant Deals, LivingSocial provides to specific hardware to each merchant interested in participating. What makes this the ideal approach for LivingSocial? 

GRIFFIN: The iPad tablet allows any merchant to instantly connect to the LivingSocial database to pull up purchased vouchers—making redemption a breeze. If merchants know the process is simple and easy to execute, they’re more likely to participate in Instant Deals.

PYMNTS: Where can we expect to see InstantDeals next?

GRIFFIN: The Instant Deals feature will be rolled out to additional markets in the comings weeks/months. The $1 lunch deal is being tested in D.C. for now. LivingSocial is aiming to complete the nationwide rollout of the Instant Deals feature by the end of 2011.