LivingSocial

By Leigh MacDonald
Photography By Michael Vonal

Seemingly overnight, social commerce has become a staple in the world of online commerce. With such a rushed entry, one might wonder whether the industry is here to stay. According to those in the know, the definitive answer is, “Absolutely.” Perhaps you’ve heard of LivingSocial or its most significant competitor, Groupon. You may have also come across other more regional social commerce sites that also offer short-term buying opportunities at discounted prices. But what—exactly—do social commerce companies do? They utilize social media tools to foster user interaction with the purpose of facilitating online buying and selling of products and services.

Recently, I interviewed Tim O’Shaughnessy, CEO and Co-Founder of LivingSocial, an international social commerce company based in Washington, D.C. The company first gained notoriety for its Visual Bookshelf on Facebook, an application that allows users to catalog and share their favorite books with their friends. Later, LivingSocial released its very popular Pick Your 5 and Polls applications, and in doing so, became the number one application provider on Facebook.

Since then, LivingSocial has launched a social commerce venture that offers daily deals to cities and regions across the United States. And because this industry is so new and in the midst of significant expansion, it is intriguing to hear an insider’s take on the social commerce concept. From Tim’s vantage, social commerce offers an easy and unique opportunity to explore new things. For instance, when a new local restaurant offers a $40 voucher for just $20, many new customers are likely to snap up the “deal” and give that restaurant a try. And while those who’ve already tried and enjoyed the restaurant are also likely to buy vouchers, they typically “share” the deal with their friends through Facebook, Twitter, and sometimes email.

You might wonder about the incentive to share, but you shouldn’t. It’s instinctive to want to tell others about a great deal that you seized, especially when your friend or colleague is likewise able to take advantage of the deal. An example?

If LivingSocial presents an unbeatable deal for eighteen holes of golf at a typically-pricey nearby golf course, you’ll likely want that deal. But it’s better than that; you’ll also want your golf buddy to know about the deal. You see, the concept works by operation of true human nature. Your incentive for pay-it-forward behavior may be as obvious as needing a golf buddy with whom you can play or as simple as wanting to share the opportunity.

What does all of this buying and sharing mean? For businesses that offer deals, it means added exposure and hopefully new customers. For consumers, social commerce translates into one great local deal after the next. When the social commerce platform works as intended, it’s a win-win for everyone.

When I asked Tim about the potential longevity of the social commerce industry, he readily noted that social commerce is here to stay. With our country’s last deep recession—during the administration of President George H.W. Bush—we amassed then-new discount retailers like TJ Maxx, Marshalls, and Ross. So it’s natural to wonder whether companies like LivingSocial and Groupon are the companies of this recession. According to Tim, they may be, but that doesn’t worry him.

Tim believes that LivingSocial is “well-timed.” He notes that people like discovering new things and that their desire to do so isn’t exclusive to recessionary times. He likewise noted that merchants want new customers through their doors. And according to Tim, those buying and selling wishes “will exist long past the recession.”

Plus, LivingSocial is serious about offering great, innovative deals with motivated merchants. The company has people on the ground in each of its local markets. These local LivingSocial employees know the local merchants and their wishes, they understand local consumers, and on the day a merchant’s deal runs, the local contact is available and ready to ensure that the deal runs properly and perfectly.

According to Tim O’Shaughnessy, “all merchants have a right to shake the hand of those with whom they do business.” With a philosophy as simple as that, I suspect that Tim’s right on the longevity point and that we’ll be LivingSocial for decades to come.