People love group deals, especially when they apply to everyday necessities like groceries. On Tuesday, Living Social’s $10 for $20 for food at Whole Foods sold at a record pace of 115,000. By 5 PM PST, the deal had sold out to 1 million people.
The number of sales is not a record for Living Social, as it previously sold 1.3 million coupons for Amazon.com. But both Living Social and Whole Foods expected the coupon to be a huge success. According to the Global Post, Whole Foods is aware its shoppers are “generally very active online.” Whole Foods spokeswoman says the store is “always looking for alternatives and ways for our shoppers to save.” Living Social is typically used by smaller grocery chains and independent restaurants, but Whole Foods clearly had a desire to not only bring back previous customers, but gain new ones.
The staggering success of the Whole Foods Living Social coupon highlights a key component of any success for a company looking to use a group coupon — you must be able to absorb the costs (and possible) loss of a coupon with both a previous and possible customer base that has either spent enough money in the past to offset any possible losses, or drive more traffic in the future that will bring you quickly back to profitable. As Whole Foods is one of the nation’s largest grocery chains (and one that offers unique selections compared to traditional grocery outlets), it has both of those demographics.
It also helps that Whole Foods tends to be more expensive than traditional grocery stores, meaning that the coupon will not simply be “half off” a grocery purchase for most consumers. An average trip to the store for me averages well over $100, meaning the coupon is a nice discount and an incentive to go shopping soon, but will likely not impact profit margins for Whole Foods.
Which is likely exactly what the deal was designed for — and should be a lesson in what it takes to have a successful group deal for other businesses.