Anyone who wakes up to an inbox full of LivingSocial offers has surely wondered whether people actually buy these things. (Boudoir photography at a discount? What could possibly go wrong?) Well, the daily deals site has put that question to rest by releasing its Q2 Member Must-Haves Study, a snapshot of what deals sell the most and to whom in the U.S.
Massages represented by far the most popular item from LivingSocial between April and June of 2011 with more 150,000 deals sold. Deals for Mexican Restaurants came in second with more than 107,000 sold, and discounts for yoga came in third with upwards of 92,000 sold.
Overall, LivingSocial sold more than four million daily deals during the second quarter, with members in Washington, D.C., California, New York, Texas and Florida buying the most.
Other highlights included 88,000 vouchers for pizzerias, nearly 20,000 for pole dancing classes, 60,000 for rounds of golf and 20,000 for laser hair removal. Only 7,000 members jumped at the chance to get some discount Botox.
What LivingSocial isn't trumpeting is the number of vouchers actually redeemed- surely a much lower number. That can be a mixed blessing for the company's partners: on the one hand, they take in revenue without having to provide a service or product; on the other hand, they don't generate new customers, which is what motivates many companies to offer deals in the first place.
In June, a Rice University researcher found that only 20 percent of deal usersreturn for full-price purchases at restaurants, bars, salons, and other retailers. Around 22 percent never redeem vouchers they've paid for.
Still, the daily deals category continues to expand, with major players like LivingSocial and Groupon now competing for attention with Loopt, KGB Deals, Scvngr, Gowalla, and ScoutMob. According to a BIA/Kelsey study from earlier this year, consumers spent $873 million on such sites in 2010, and will spend $4 billion with them by 2015.
Correction: This story originally incorrectly reported that only 20 percent of daily deal coupons are redeemed when acutally only 20 percent of deal users return for full-price purchases from daily deals advertiser establishments.
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Douglas Quenqua is a journalist based in Brooklyn, NY who writes about culture and technology. His work has appeared in The New York Times, Wired, The New York Observer, and Fortune.
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