E-mail offers from Groupon, LivingSocial attract buzz as a new marketing model
-
Capt. Mark Schiller on his Pittsburgh Water Limo's luxury boat, which offers Steelers game cruises. "LivingSocial and Groupon are a great way to get very quick exposure," he said.
Share with others:
Every weekday since mid-January, a different deal from Groupon has appeared in the e-mailboxes of Pittsburgh-area consumers who might jump on a short-lived chance to get a manicure at 50 percent off or a discount on dinner at a local restaurant or $125 worth of furniture for $35.
In late July, a competing business called LivingSocial entered the Pittsburgh market, and another competitor, Less.com, plans to enter the market soon.
Most e-mail deals are deleted. But the ones that aren't have attracted attention to a new marketing model that has in some cases produced shopping frenzies reminiscent of an early-bird special on Black Friday.
Now businesses and the marketing industry are trying to figure out what has given the model such pop and whether it will pay off in the long term.
"Your hope is that you're going to get new customers," said Robert Levin, of Smithton-based Levin Furniture, which had 948 takers for a deal it offered recently on Groupon's Pittsburgh network. "We just felt we wanted to experiment with it."
Lots of people are experimenting with it.
The best-known of the social media daily deal businesses is Chicago-based Groupon, which was founded by Pittsburgh native Andrew Mason and is widely seen as the trendsetter in the segment since its late 2008 launch. Groupon's website claims to have sold more than 14.8 million discounts in markets in the United States and internationally.
In the two years since Groupon sent out its first deal to Chicago subscribers, there's been so much interest that, in addition to a wave of imitators, the market has spawned aggregators promising to choose the best daily deals from the various companies for each customer. Even retail behemoth Wal-Mart last week began offering its own CrowdSaver deals on Facebook.
Just as a Groupon deal goes through only if enough people buy in, the CrowdSaver deals are offered only if enough people click the "like" button. That encourages people to help out with the marketing by promoting the offers to their friends and, in some cases, get rewarded with even more discounts.
First Published October 31, 2010 12:00 am
