The stigma attached to discount deal and voucher sites "has gone" claims LivingSocial's UK managing director Peter Briffett, as he talks over the evolution of the sector in recent months.
Having headed up the UK team for LivingSocial since its beginning three years ago, Briffett has been asked on many occasions about the reputation the deals industry gained because of the poor service and misselling that major rivals such as Groupon became accused of for a period.
It's an industry that has grown massively. LivingSocial now has over 70 million members around the world, and employs over 4,000 staff across more than 15 counties in five continents. The UK service covers 30 towns and cities, with over four million customers, and more than 16,000 businesses.
In the first half of this year, LivingSocial members made savings of over £40m across the 800,000 vouchers that were purchased, the service claims.
With this in mind, Briffett tells The Drum that as the daily deals sector has become more commonplace and widely accepted; family high street brands have started to look to connect with the audience, which has improved service and the levels of trust that can be invested in the offers now being promoted.
"A lot of the initial customer issues over purchasing has gone, it’s probably much more commonplace," he states. "The fact that you are able to do a lot more redemption on a mobile is important and there is a lot less of a stigma attached to it now. We are absolutely seeing that."
Briffett also admits that there is still some mistrust and poor service out there by some companies, but he believes that both customers and merchants can have more faith in LivingSocial, which is able to offer more data to help prove return on investment, making it a more attractive marketing model.
"With all marketing, unless you can prove ROI it’s difficult for businesses to put big money behind it."
Briffett explains that over the last year, LivingSocial has expanded its model beyond local daily deals to include travel and national product offers, as well as an events platform and entertainment deal, although local deals remain its core offering.
Working with national brands such as Starbucks and Marks & Spencer is also more time consuming for the company, but is proving to be a successful evolutionary step, he continues.
"We've got a lot of data that shows why it works, why customers come back, how much they spend, it actually stacks up from an ROI perspective and all that data has helped us have meaningful conversations with national brands which we couldn’t do when we didn’t have those data points."
In recent months the site has also welcomed sponsorship opportunities from the likes of the Post Office and Mercedes as it has grown in prominence, while a deal with Tesco to integrate its Clubcard rewards scheme has also helped it entice and reward returning custom.
Briffett explains that in the months since it was introduced, LivingSocial has "a clear upward trend in purchase behaviour among registered members," and well it should with a loyalty scheme that has over 16 million members.
"This is a long-term deal for us. It’s quite a fickle industry where generally the best deal or the best content wins. Our partnership with Tesco is really important because it feeds loyalty into our model and it means if you purchase anything through LivingSocial you are able to acquire club card points as a result of that purchase."
He states that the deal allows LivingSocial to offer its customers something none of its rivals are able to - loyalty. "We’ve got a strong offering for consumers, not just in terms of content, but we’ve also given ourselves the ability to build-up loyalty with those customers. We’ve had tens of thousands of people register club cards - it’s proving very successful."
He also reveals that there are other partnership deals on the table that encourages him that there is more to come for the business in the coming months.
As for the evolution of mobile, Briffett claims that engagement levels have "gone through the roof" with mobile purchases having grown to between 20 and 30 per cent (37 per cent in August). Almost half of the company's UK traffic is also delivered through a mobile device. Despite this, he says that he doesn't believe that desktop will die. He also concedes that despite now having 1.6 million fans on Facebook, email continues to be the platform's most powerful marketing tool.
LivingSocial sounds to be in rude health, and as the UK consumer continues to seek out value for money and a bargain, the coming partnership deals and Tesco affiliate partnership are likely to only see its growth continue in the coming years. That's as long as it continues to keep the faith of its customers.