In a move that should reignite media interest in the social-coupon niche, LivingSocial's offering $20 worth of Whole Foods Market
It will be interesting to see whether LivingSocial's deal tops the more than 1.3 million Amazon.com
It probably won't. LivingSocial's reach has probably grown substantially over the past eight months, but Whole Foods doesn't have the universal appeal of the leading online retailer. A lot of people just don't live near one of Whole Foods' 308 stores -- while we're all a mouse click away from Amazon's virtual storefront.
Then again, this isn't a race. It's really about getting folks excited again about flash sales.
It's been a rough few days for the once-booming industry. Groupon called off its investor road show. A study of Yelp merchants finds that offering a social coupon typically translates into lower user reviews. Google
This deal is more about LivingSocial than promoting discounted organic groceries. Whole Foods doesn't need this. It has rattled off several consecutive quarters of booming comparable-store sales. Why would it take a quarter on the dollar -- since merchants usually split the voucher proceeds somewhat evenly with coupon sites -- even if it knows the average customer will be buying far more than $20 worth of natural foodstuffs?
Just as it was later reported that LivingSocial was the one essentially subsidizing the Amazon deal to draw attention away from Groupon, this one smells just as tactical. Aiming at upscale organic shoppers will give other high-end merchants the validation they need to hop on board.
I know. Whole Foods isn't as expensive as some suggest. The "Whole Paycheck" joke is a long-debunked myth. Today's "Half Paycheck" jokes will come. However, the brand itself does represent a respectable, polished, and full-priced brand that LivingSocial and its rivals would love to be associated with right now.
Sweet move, LivingSocial. Now you'd better hope that Whole Foods doesn't take a reputational hit.
If you want to follow the organic grocer to see how it fares after this deal, add Whole Foods Market to My Watchlist.
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