Could LivingSocial Use Adventures To Pull Ahead of Groupon?

May 18, 2011

10:29 am

Recently I was working out of one of my favorite Philadelphia coffee shops when I had the pleasure of meeting a young woman who works for the Adventures vertical of LivingSocial. This venture, formerly Urban Escapes out of NYC, was acquired by Living Social late last year.

This person, who I very much enjoyed meeting and whose anonymity I will preserve herein, overheard me on the phone talking about an upcoming trip to NYC to visit a client in the “Daily Deal” space. As a LivingSocial employee, naturally my chatter perked her ears. The conversation began with her asking me if I was running a deal with Groupon, so I explained that I work with early stage companies, some in the social commerce space.

The discussion continued and focused mainly on the shift towards experiences over discount vouchers and how that is being driven by two main factors:

●     Business owners are being inundated with pitches to host deals from dozens of daily deal companies each month, all of them with virtually identical offerings.

●     The widely held perception of business owners is that those who opt-in for a daily deal are simply discount hounds, never to return. I disagree but this is the perception.

I talked a bit about how I felt the industry was moving towards discount as a secondary motivator with experience as the thing that drives the opt-in. I also spoke of WAAG (a company that my company just helped launched) a recently launched venture out of NYC that leverages this premise to connect those who wish to network themselves offline with small businesses and brands who want to host events at their locations.

My new friend was very enthused about the adventures LivingSocial was promoting. She made them sound like good fun. As we were talking, I ran a Google search to find the home page for LivingSocial Adventures. Clicking around a bit on my laptop, I could not for the life of me find a place to enter my email to be notified. Perplexed, I asked:

Where do I opt-in to get invited to the adventures?

You don’t.

Hmmm…. It turns out that you have to go to the main site and opt-in to receive the daily deals in order to get the adventures invites.

I have no way of knowing what was on the minds of the executives at LivingSocial when they acquired Urban Escapes and re-branded it as Adventures, but it would seem to me they are missing a huge opportunity to bring new people into the fold. There probably is a large number people open to the idea of passively participating by opting-in to receive invites to cool new social experiences, but may not be so keen on the idea of receiving a discount voucher at their local pizza shop.

Now, certainly the master list of email addresses should be leveraged for Adventures but why not market it separately? Seems like LivingSocial could take advantage of the Adventures brand to gain interest and new LivingSocial users on a more niche level. Also LivingSocial could send emails to all existing users asking them if they wish to receive adventures in their area, but focus on driving new membership to adventures specifically and then cross market those people into the more profitable daily deal list.

LivingSocial trails Groupon, their biggest competitor, but is gaining ground with plans on overtaking Groupon in 2011. In my opinion, the Adventures play is an opportunity to stand out to a larger portion of the public and businesses, both sick of the daily deal speak. Using some of that advertising budget to really push this new, experience-based vertical and take a chunk of new market share in the process.

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Jason Lorimer is a strategist and fellow entrepreneur @Entrepreneurs (http://blog.culturahq.com/), where he works to advocate and execute on behalf of those with the ambition to do more than just entertain ideas. Jason and his team transform pre-internet business models into post-internet companies and prepare them to scale. Most recently Jason has set out to help cultivate industrial age cities into start up hubs. You can follow him @JasonLorimer

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