Why Living Social scored big with Whole Foods

Earlier this week, you may have seen your social network friends talking about the Whole Foods promotion with Living Social. The flash sale created quite a frenzy by offering $20 worth of Whole Foods groceries for $10 with 5% of proceeds going to their charity group, The Whole Kids Foundation.

They sold 1 million deals on Tuesday and experienced heavy traffic that threatened to take down several of the company’s servers. That afternoon, Living Social spokesman Andrew Weinstein said “We’re currently selling more than 115k per hour, or more than 30 per second.”

So why did so many people get excited about this daily deal?

1. Authentically Good Offer The simple recipe for business success is quality & value. The market responded quickly because Whole Foods offers a good product and Living Social provided the incentive for people to get a good value.
2. Exclusivity This is the first time that Whole Foods has offered a daily deal. Their reputation as a high-end grocery store has earned them the nickname “Whole Paycheck” but in reality, they offer competitive pricing on many items. This is a smart move by Whole Foods to attract cost-conscious customers that otherwise may not step foot into their store.
3. Strong Brand Value Whole Foods has created a set of Values that have guided them to become a trustworthy leader in their field. Many people are also attracted to their commitment towards local foods that offer better nutrition, higher quality and more sustainable farming methods.
4. Word of Mouth This was social selling at its best. Influential people in the social networks were spreading the “act now” message to their friends and family that helped the promotion take off so quickly.
5. Cause Marketing The company promised to give 5% of proceeds to their Foundation that supports schools and families that improve children’s nutrition and wellness. Cause marketing creates a stronger connection to the brand and builds goodwill within the communities that they serve. This passive giving component makes people feel better about the impact they are making with their purchase decision.

This was a positive story for Living Social — especially in the wake of their competitor, Groupon’s recent setback with their highly-publicized IPO being put on hold. Some have argued that consumers are beginning to suffer from Daily Deal Fatigue but stories like this prove that daily deals can work when the right ingredients are in place. Expect many changes in the crowded group deals space where smaller competitors will fade away or become absorbed by the leaders. But for now…. well done, Living Social!