Daily deals site LivingSocial is launching an Instant Deals program today in Manhattan in a big way: More than 100 midtown restaurants are offering $5, $15, even $50 worth of food and drink for just $1. Our Q&A with LivingSocial CEO Tim O’Shaughnessy has all the details.
LivingSocial introduced its first Instant Deals program in its hometown Washington, D.C., in mid-April. Now, the Instant program—in which special offers must be purchased and used that day only, typically within a three-hour time window—is expanding to its second city, New York. Instant Deals are expected to be available nationally by the end of the year.
As for today (Wednesday, June 8) in NYC, the Instant Deals can be purchased now, with the eating and drinking commencing at 11 a.m. The restaurants participating include Otarian ($1 for $12 to spend on lunch), Prime Burger ($1 for $20, max two certificates per table), and La Mangeoire ($1 for $50, one certificate per table). Dessert is available too: The 888 8th Avenue location of Heavenly Delights is offering two small cups of ice cream for (of course) $1.
If you’re confused how Instant Deals work, LivingSocial created a handy how-to video, with no words or anything (mute the music and you can watch it undetected at work):
[youtube=http://www.youtube.com/watch?v=n-YYf9BFxeE]
Here’s one more quick tip for the uninitiated: No matter what you pay out of pocket for a meal, always tip your servers on the full amount. And come on, if you’re only spending a buck, you should be tipping especially well.
I spoke yesterday with LivingSocial CEO and co-founder Tim O’Shaughnessy and Instant Deals, the company’s future plans, and why restaurants really are the perfect match for the daily deals concept. Here’s our Q&A:
What kind of deals can people expect in New York City on Wednesday? Is it just midtown?
Tim O’Shaughnessy: Yeah, we’re focusing on midtown because it’s where a lot of people work. It’s dollar lunch day, and we thought it made the most sense to start in. It will primarily be restaurants – places within a block or two of where folks work. Just about everybody in midtown can find a place to go and have lunch for a buck tomorrow.
So you should really be able to get lunch for a dollar?
T.O.: Yes. Normally, the deal might be to pay $10 for $20 worth of food and drink. And we’re reducing that down to $1. So if you can buy lunch for less than $20, and you can at most places, then you can really get lunch for a dollar. [time-link title=”(Read about how coupons became cool)” url=http://moneyland.time.com/2011/06/06/how-the-coupon-lost-its-dorky-penny-pinching-stigma/]
Tell me about how things went when you launched a similar option in D.C.
T.O.: We first did the dollar lunch day in D.C. about two months ago, and it was to get the program out there. It was very well received. We had tens of thousands of people who got lunch through us that day. We also have continued with more deals the next day, and the next day. You’ve been able to go back and get great value from those same merchants. Not paying $1 for your meal, but the deals are successful at getting people in the door. It’s been working out nicely. We’ve expanded to more sections of D.C., and we’re going to do the same thing in New York.
We’re talking about short-term deals – something available over the next couple hours, right? Are we talking lunch, dinner, or what?
T.O.: It’ll vary pretty wildly. The deals will usually be consolidated around lunch, and then happy hour and dinner. It will usually be a shorter time frame offer. Say, for example, the restaurant’s lunch rush starts to tail off at 12, or 12:30, or they’re slow on Tuesdays, they can put something live for a few hours to try and juice their business. It’s not something up all the time, but we have enough people participating so that you as LivingSocial member can pull up your iPhone app or Android app or whatever and see a whole host of restaurant deals within walking distance of where you are.
For somebody who doesn’t have a smartphone, is this even possible?
T.O.: It is. You can go to the web as well, and there’s an “Instant” tab and you can buy through the web. Then, you can redeem in a variety of different ways. If you have a smartphone, you can just pull it up the app. Or give us your phone number and we’ll text you the relevant info to redeem, with the voucher number and everything. As long as you have a cell phone, that’s all you need. [time-link title=”(Read 10 Rising Trends in the Daily Deals Market)” url=http://moneyland.time.com/2011/05/10/groupon-o-rama-10-rising-trends-in-the-daily-deals-market/]
So after the big splash on Wednesday in New York, what can people expect on Thursday and Friday and beyond? Is it going to be similar deals, but maybe not for $1? Will there be as many deals?
T.O.: People should actually see an increasingly large number of merchants participating. We expect to continue to grow the day after. Other merchants will see what happened and they’ll want to be in on Thursday. The deals will obviously be different. Part of the product is that they always will be changing. So one day a merchant really wants to be pushing, um, lunch, and then the next day they want to push happy hour. It’ll continue to evolve. We will also pretty quickly roll out beyond the midtown area. It’ll be a city-wide program, so after the launch on Wednesday you’ll see things in the Upper East Side, Upper West Side, downtown, pretty quickly.
You hinted at this, but is the mystery of the unexpected – the sense that you’re never know what deals you’re going to find – a big part of the attraction?
T.O.: It is. From a LivingSocial member perspective, it’s kinda nice. You’re figuring out, “Where am I going to have lunch today?” And we give you a lot of different options every day. It might even be the same merchant, but different items or deals they’re featuring. So you’re right, that that is part of the allure, that it’s always changing, and hopefully there’s always going to be something new for you to check out.
Are you seeing some of the restaurants specifying menu items with daily deals. Are they getting more specific and quirky?
T.O.: With the LivingSocial Instant product, restaurants are testing out a few different types of models. With the daily deal model, it hasn’t changed that much. What we have works, and works pretty well. With the Instant product, it gives restaurants the opportunity to try different things. You know, like maybe the deli has too much turkey. They can push something around “Get chips, a drink, and a turkey sandwich” for $7 or $6 or whatever the right price point is. And they can tailor it around specific products a bit more. [time-link title=”(Read about LivingSocial introducing the $10,000 coupon)” url=http://moneyland.time.com/2011/03/08/introducing-the-10000-coupon/]
There are daily deals for everything nowadays. In your opinion, are restaurants really the perfect match for these kinds of deals? And if so, why?
T.O.: It’s a great question. Our perspective is that restaurants are really the backbone of any local community. Consumers go and interact with restaurants on a really regular basis. It kinda comes down to: Everybody’s gotta eat. You know, restaurants are also a social experience. You go out to lunch, you go out to dinner with friends. From a restaurant’s perspective, if they have empty booths, empty tables, empty seats … that’s incremental revenue that they could be getting that they’re not. They’re open, and might as well try to get more people in.