The latest incarnation for the company comes as it has struggled to replicate the success of its daily deals business. Discounts to spas, restaurants and retail outlets catapulted LivingSocial into a multinational corporation, but creating new revenue streams that help it stay there has proven to be a challenge.
This isn’t the company’s first foray into non-daily deals. LivingSocial tried out a real-time deal service in 2011 that allowed customers to see short-term deals, some as long as a couple hours, in their immediate vicinity. That was discontinued a year later.
Still, executives expect the move away from daily-only deals will fundamentally alter the way LivingSocial interacts with its two key constituents: subscribers and merchants.
The former will now have more deals to scour and potentially buy. Executives hope the volume of deals alone will equate to more sales, and thus, more revenue. But the change is more substantive than that, executives assert.
Before, LivingSocial was in the business of “generating demand,” meaning they put deals in front of subscribers that they weren’t seeking otherwise and goad them into making an impulse purchase. Few people wake up itching to go skydiving for example, but LivingSocial aimed to give you that desire each time you opened one of its e-mails.
The new format allows the company to capture people who already have a demand for a product or service — they plan to get a massage soon or go out to dinner this weekend, for example — but want to shop around for the most compelling or cost-effective option.
“What we hear from consumers is they want more great deals from us, and so a big part of what you’re seeing is greatly expanding the selection of inventory that we’re able to offer our users on a day-in, day-out basis,” said Jake Maas, senior vice president of product and operations.
The company’s travel deals, called Escapes, is among the first categories to be revamped. Last week, the site began serving up an expanded inventory of offers for both packaged getaways and hotel stays. Visitors can now peruse roughly 1,500 options compared with the 200 that were available before.
The shift puts LivingSocial in a line of business already crowded by the likes of Expedia, Kayak.com, Travelocity and Travelzoo. Those sites, among others, offer an even broader selection of vacation packages and travel deals.
Under the new strategy, merchants, meanwhile, will be able to advertise through LivingSocial on an ongoing basis rather than be stuck with one-time promotions. That gives businesses the option to attract new patrons slowly over time rather than responding to a glut of them all at once.
Executives expect the change could create new revenue streams for LivingSocial from merchants that were unwilling to participate in the older model or simply grew tired of it.