FTD.com Offers Mother’s Day Deal on LivingSocial (This Time Without the Fine Print)
LivingSocial, the second-largest group-buying site, is offering a national deal with FTD.com to offer heavily discounted flowers and gifts just in time for Mother’s Day.
Hopefully, consumers will find it a sweeter deal than last time.
Three months ago, FTD.com offered a Groupon deal of $20 for $40 worth of flowers and gifts on for Valentine’s Day. But the offer was yanked early after users called the deal a scam. The coupon, which was bought by thousands of people, directed buyers to a special website to take advantage of the offer. The problem, users said, was that prices were higher on that site than on the regular website.
This time, the voucher will be applied at the check-out to any regular or sale item found on FTD.com. People can pay $15 for $35 worth of flowers and gifts to be delivered on Mother’s Day. Or, they can spend $12 for $30 worth of flowers for any day after Mother’s Day.
The FTD offer on LivingSocial demonstrates how daily deals are not just for local commerce, but how national brands are increasingly willing to test (and re-test) the effectiveness of driving awareness to their businesses through discounts and mass mailings. (In a separate post today, I write about a day in the life of two local LivingSocial employees who make sales calls in Seattle.)
LivingSocial has run national deals before. In conjunction with Amazon.com, which has invested in the Washingon, D.C., company, it offered $20 gift cards to the e-commerce web site for ten bucks. LivingSocial had a hard time fulfilling the 1.3 million vouchers purchased. It’s also worked with Fandango to sell movie tickets.
This deal also highlights the rivalry and competition building between Groupon, which is the market leader, and LivingSocial, which is smaller but gaining.
Mitch Spolan, who is heading up the effort at LivingSocial as the SVP National Sales, has only four weeks under his belt, having come most recently from Yahoo. Fueling the storyline that LivingSocial and Groupon are in a tight race is that another Yahoo exec, Lee Brown, who Spolan worked with closely, left Yahoo late last year to head sales at Groupon.
Spolan was particularly cheerful last week delivering the news that LivingSocial had a deal coming up with FTD.com, even after its experience with Groupon. To rub it in even more, Spolan brings up another sore subject (although he swore it was an accident).
“Mother’s Day is the Super Bowl of flowers,” he said. “More flowers are sold for Mother’s Day than any time of year.”
Yes, the Super Bowl. The same event in which Groupon rolled out its first advertising campaign that managed to offend its users. It had to yank it (just like the FTD offer).
This deal with FTD will be different, Spolan swears. “We are providing a great deal for our members, and are fully disclosing everything. The offer is available to all the products on FTD.com, and in addition, we put the fine print in plain English. It’s crystal clear before they hit the buy button,” he said.
It’s unclear how the revenues on this deal will be split between the partners.
Typically, half of what the consumers pay for the voucher goes to the retailer or merchant, and half goes to LivingSocial or Groupon. It’s the split that could suffer under steep competition, especially since it’s not always going to be a two-horse race. On a national basis, Facebook and Google have thrown their hats into the ring, along with dozens–if not hundreds–of competitors on a local level.
Spolan’s confident of the company’s leading position.
“If we went back eight months in time, there were two companies that had 90 percent market share and today there’s two companies that have 90 percent market share. On a local level, it’s true, but from a national level, that’s less so. They [the brands] are looking at that market share position.”
In an interview, Rob Apatoff, FTD’s president, told me he didn’t think that the Groupon offer was unfair. Traditionally, consumers haven’t been able to combine multiple offers, so why should it be different in this case? “There was confusion with a group of consumers. We talked to Groupon at the time, and we decided to honor both discounts,” he said. “The consumer got a better deal than the one they signed up for. We addressed it immediately. We let the consumer win.”
The consumer will also win this time because the voucher will be applied to anything on the site, including sale items.
Apatoff said he believes that group buying fits in with the company’s social media strategy, which it is committed to having as part of its marketing mix. But it’s too early to say if they’ll do another offer.
“We’ve been happy with the partners that we are in business with now. We are happy with the company we are keeping,” he said.