What's the Deal with LivingSocial?
Posted: 9 Apr 2012
Date Written: February 24, 2012
Tim O'Shaughnessy, the 29-year-old CEO of LivingSocial, is growing a revolutionary worldwide business of "daily deals" - in which retailers offers a heavily-discounted product or service available for purchase for brief (often 24-hour) windows. The case explores the complicated sharing of risks and rewards between LivingSocial, participating retailers, and customers, focusing on the return on investment in both the short- and longer-term for LivingSocial's retail partners. In addition, given the rapid growth of the daily deals space and the accompanying proliferation of competitors including Groupon and Amazon.com, the case focuses on the need for constant innovation in product offerings to maintain differentiation from copycats.
Learning Objective: The case is an ideal vehicle to revisit the basics of advertising and consumer management in a contemporary technological context - online daily deals. The case discussion is designed to help the CEO devise a strong strategy of marketing innovation (and leverage his position as an intermediary between the world of "online" and the world of local businesses). In order to facilitate this discussion, the discussion involves understanding a) the power and trends of technological platforms in the age of social media, b) the tactics and economics of sales incentives and contemporary advertising, and c) the basics of market segmentation and customer management.
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