LivingSocial Finds A Rockstar Partner in Amazon
Posted by Michael Dossett
With Groupon leading the way, Google Offers making waves, and Facebook Deals under development, the local coupon market is one of the fastest-growing sectors in tech right now. Dozens of imitators have sprouted up looking to ride the coattails of the market’s recent success, but LivingSocial has emerged as a clear second place stalwart with the help of a rockstar partner.
The month of January marked a significant step in the development of LivingSocial, with the Washington, D.C.-based company receiving a $175 million strategic investment from Amazon. A wildly popular coupon that gave buyers a $20 Amazon gift card for $10 was purchased by more than one million customers, many of them first-time buyers.
On the day of the Amazon deal, mentions of LivingSocial on Twitter and Facebook skyrocketed, and the power of social proof helped the coupon spread across the Web like wildfire. An Experian HitWise report (seen below) indicates US traffic to LivingSocial jumped 80% during the week of the Amazon deal.
It’s likely that traffic will subdue in the coming weeks without another irresistible deal driving users to the site, but the Amazon deal put LivingSocial on the map as a formidable opponent to Groupon in a highly competitive market. Tens of thousands of new users registered to snag a 50% off Amazon gift card, and even if only 20% of those new users return to the site and purchase other deals, LivingSocial will have gained valuable ground against Groupon.
With the prospect of competing against such a well-established foe, not to mention the powerful forces of Google and Facebook, LivingSocial will benefit immensely from their new partnership with Amazon. The value of this partnership cannot be understated. Aside from the ever-important infusion of capital, LivingSocial now has an incredible resource of technical and logistics knowledge. The increased visibility provided by the Amazon partnership will help LivingSocial penetrate the market and gain all-important mindshare.
The trifecta of Groupon, Google Offers and Facebook Deals will ensure a long and hard-fought battle ahead, but with Amazon in its corner, LivingSocial could be a force to reckon with.