Starbucks officially set a new record for daily deals this Wednesday, offering 50% off a $10 purchase through LivingSocial. The deal was sold out by 11pm ET, with 1.5M gift cards purchased. This obliterates the previous record held by Amazon (1.15M sold) who offered 50% off a $20 purchase in January 2011.
The daily deal industry is hardly a new concept. Tens of thousands of bargains make their way across the web every day, distributed through an ever-expanding horde of companies (Groupon, LivingSocial, Woot, etc).
So what made this particular deal so mind-blowingly successful?
The company put out a press release on Tuesday, 24 hours before the deal went live, which lends some light insight into the strategy:
Adam Brotman, Starbucks’ chief digital officer, said the company’s decision to work with LivingSocial shows that daily deals still work for some merchants. He further added, “It’s an evolving space, the type of deal, the type of merchant and the implementation of offers are going to be different from circumstance to circumstance.”
A little vague, but we can reason that there were several contributing factors. In essence, Starbucks created a perfect storm for caffeine lovers:
- Starbucks had a sky-high cap at 1.5M gift cards. Most deals only available in considerably smaller quantities, and are rarely offered at the national level.
- The infamous Pumpkin Spice Latte recently made its annual debut back on the menu.
- Discounts and coupons are rarely this easily-accessed for Starbucks.
This is the second time the coffee king has experimented with a daily deal, offering a nearly identical discount via Google Offers in April. While being received with less fanfare, the Google Offers promised to donate $3 (up to $3 million) to the Opportunity Finance Network (OFN) for the Create Jobs for USA Fund. The LivingSocial deal, however, had no charitable connection.
Bottom line, it’s reasonable to assume the lines will be a little longer than usual for the foreseeable future. Do you think the success of this deal will inspire more confidence in the daily deal industry? Let us know in the comments!
Paul Matson is a Social Media Strategist at Razorfish, based in Chicago. When he’s not strategizing the information highway, you can find him working hard to create the world’s next great cat meme. Tweet him at @PaulMatson.