Historical Context
LivingSocial, founded in 2007, quickly emerged as a key player in the group buying and daily deals market, akin to its better-known competitor Groupon. The concept of group buying, where companies offer discounts on services or products if a minimum number of customers purchase the deal, appealed to both consumers seeking bargains and businesses looking to increase foot traffic.
Business Model
LivingSocial’s business model revolved around offering substantial discounts on a wide variety of local experiences, such as dining, travel, entertainment, and services. Here’s how it worked:
- Partnerships: LivingSocial partnered with local businesses to create deals.
- Marketing: These deals were marketed to consumers via email, social media, and the LivingSocial website.
- Group Buying: Consumers needed to reach a specific number of buyers for the deal to be activated.
- Revenue Sharing: LivingSocial took a percentage of the revenue from each deal.
Key Events
- 2007: LivingSocial was founded.
- 2010: Raised significant venture capital and expanded globally.
- 2013: Amazon invested heavily in the company.
- 2017: Groupon acquired LivingSocial.
Features and Offerings
- Daily Deals: Curated deals in various categories.
- Escapes: Special offers on travel and vacations.
- Adventures: Local events and activities.
- Instant: Time-sensitive deals that could be redeemed immediately.
Impact and Importance
LivingSocial had a substantial impact on local commerce by:
- Driving Consumer Traffic: Businesses experienced an influx of new customers.
- Expanding Reach: Small and medium-sized businesses reached a broader audience.
- Revenue Model: Provided a performance-based revenue model for local merchants.
Applicability
- For Consumers: Easy access to discounted experiences and products.
- For Businesses: A platform to increase visibility and attract customers.
Considerations
- Sustainability: Both Groupon and LivingSocial had to navigate challenges related to the sustainability of the deep-discount model.
- Consumer Behavior: While consumers benefited from deals, the pattern of deal-seeking could affect long-term customer loyalty for businesses.
Related Terms and Comparisons
- Groupon: The direct competitor and often compared in terms of market share and business model.
- Deal Aggregators: Websites or apps that collect and display deals from multiple sources.
Famous Quotes
- “A penny saved is a penny earned.” – Benjamin Franklin
- “Opportunities don’t happen. You create them.” – Chris Grosser
Jargon and Slang
- Flash Sales: Limited-time sales that offer significant discounts.
- Daily Deals: Deals offered every day, valid for a short period.
- Group Buying: A purchasing model where a deal is activated only when a minimum number of buyers commit.
FAQs
What differentiates LivingSocial from Groupon?
LivingSocial and Groupon had similar business models but different marketing strategies and geographic focuses.
Is LivingSocial still operational?
LivingSocial was acquired by Groupon in 2017, and as a standalone brand, it no longer operates.
How did LivingSocial make money?
LivingSocial earned revenue by taking a commission on each deal sold, typically 30-50%.
References
- TechCrunch. (2017). “Groupon Buys LivingSocial.”
- Forbes. (2013). “Amazon’s Investment in LivingSocial.”
Summary
LivingSocial was a significant player in the group buying sector, known for offering consumers substantial discounts on local goods and services. Through strategic partnerships and effective marketing, it provided value to both consumers and businesses, despite challenges in sustainability. The legacy of LivingSocial continues under Groupon, highlighting the impact of innovative e-commerce platforms on local economies.
