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Subscribers snap up LivingSocial's Whole Foods deal

LivingSocial has already sold 600,000+ deals for Whole Foods groceries

Financial trends and news by Faith Merino
September 13, 2011 | Comments
Short URL: http://vator.tv/n/1edf

LivingSocial is making waves again with another big nationwide deal.  This time, the company has partnered with Whole Foods to offer a 50% off deal: $10 for $20 worth of groceries.  Translated into Whole Foods prices, this equals a gallon of organic milk.

As of 10:30 am PT, over 630,000 people have already purchased the deal, with 22 hours remaining.  It looks like it might easily quash the previous high set by LivingSocial’s Amazon gift card deal, which more than one million people purchased back in January. 

As part of the deal, 5% of the sale price on each deal purchased will go towards Whole Foods nutrition and education charity, the Whole Kids Foundation.  The foundation's stated mission is to end childhood obesity and promote health and wellness through partnerships with schools, educators, and organizations.  Among the foundation's current programs are Let’s Move Salad Bars to Schools, a School Garden Grant Program, and a teacher nutrition and cooking education program.

Earlier this year, LivingSocial made headlines with its Amazon gift card deal, which offered $10 for $20 worth of Amazon goods.  The deal followed in Groupon’s footsteps after the wildfire success of its nationwide Gap deal, in which it sold 440,000 deals and raked in some $11 million.

But LivingSocial’s Amazon deal came with a surprise twist: LivingSocial fronted the bill.  Normally, the merchant offers the product at a discount and absorbs the loss in exchange for higher traffic which essentially generates more revenue.  But in this case, LivingSocial actually purchased the gift cards from Amazon first and then sold them for half their purchase price (assuming LivingSocial paid full price for the cards—neither LivingSocial nor Amazon would disclose how much the company paid for the gift cards).

Despite the huge loss that LivingSocial invariably suffered, the deal had the desired effect of calling more attention to the daily deal giant at a time when Groupon was getting all the love.  Its success ended up prompting Groupon to launch a similar deal a couple of weeks later: $10 for $20 worth of Barnes & Noble merchandise.

It doesn’t look like LivingSocial will be taking a loss on this deal. 

 


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