When I first heard that Amazon & LivingSocial are, in effect, giving away money, the first thought that came to mind was ‘BUBBLE’.
Which may very well be the case, but it’s also a very aggressive and potentially brilliant marketing move. The cost of customer acquisition almost always makes the first sale for any company - particularly in a market as competitive and margin-starved as retail - a money-loser. So why not just be right upfront about it?
Of course it remains to be seen whether this promotion will close the gap between LivingSocial and Groupon, but I suspect it will, at the very least, make a big dent.
LivingSocial will pick up a large batch of new customers today. I expect to be one of them.