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Consumer’s overwhelming response to LivingSocial’s offer of a $10 for $5 Starbucks (NASDAQ:SBUX) virtual gift card made it the best selling daily deal so far. It also proved that coupon and daily deal sites can generate significant marketing for companies like Starbucks.
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On September 6th, the site sold as many as 67 coupons per second and sold a total of 1.5 million of that day’s deal by 11 p.m. EST, reaping in $7.5 million in revenue. In response to the deal’s success, Starbuck’s chief digital officer Adam Brotman told Reuters that his company’s decision to work with LivingSocial shows that daily deals can help some businesses.
Samuel Junghenn, founder of marketing firm Think Big Online, thinks that LivingSocial’s Starbucks deal is “the strongest indication yet that coupon and daily deals sites can generate marketing for companies,” thus making daily deal sites profitable. He further notes in a press release distributed Wednesday, that “as social media continues to dominate the web, sites like LivingSocial that offer discounted goods and services and integrate with social media will continue to grow.”
However, now that LivingSocial, a private company owned in part by Amazon (NASDAQ:AMZN), has shown that the daily deal can be hugely profitable, the question that remains, is how Groupon (NASDAQ:GRPN) will fair. Although Groupon is LivingSocial’s primary competitor and the largest daily deal company in the business, it continues to suffer from its overly hyped IPO last year with low stock prices. Following the success of LivingSocial’s Starbucks deal, shares of Groupon hit a record low of $4 last week.
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