What’s the Daily Deal? Groupon and Livingsocial Offer Deep Discounts

What happens when you marry e-commerce and social networking, then add the age-old advertising tag: limited time only? The result is deal of the day.  Here’s how it works. You sign up at the deal website, and everyday you get a special offer via e-mail for a deeply discounted product or service  (normally 50%) customized for your location. The catch is you can only purchase the deal that day. But typically, you have up to a year to use the deal you purchased.

The concept was popularized by Groupon. As its name implies, Groupon’s deal doesn’t go into effect until a specified number of people have signed up for the deal. At that point, the “group is on” and the deal goes into effect.

GroupOn success has spawned dozens of competitors, including Livingsocial. Livingsocial’s deals don’t require a specific number of sign ups before the deal is on. And it capitalizes on a social networking staple: friending. Livingsocial invites you to share the deal with your friends. If three of your friends sign up for the deal, you get the day’s deal for free.

Both Groupon and Livingsocial target the under 35 demographic. But there’s plenty there for over50s. Spa packages abound. So do food deals: Middle Eastern, Italian, sushi, crepes, cupcakes, chocolate, Peruvian chicken and of course pizza. Recent deals have included museum memberships, fitness classes, sports events and adventure: kayaking and sky diving (no you are not too old!). And I –and 1.3 million others—purchased a $20 Amazon gift card for $10 on Livingsocial. (Amazon recently bought Livingsocial.)

Beware Impulse Purchases!

It is so easy to purchase a deal. (Click to buy.) And there are so many good deals that it is hard to resist impulse purchases. I have to keep my finger from clicking on the frequent spa deals. And a warning: checking on the daily deal is somewhat addictive.