NEW YORK (MainStreet) — It seemed like any other deal.
For one day only, customers had the option to pay $10 in advance to purchase a $20 Amazon gift card from LivingSocial, a popular coupon site. Certainly this was a bargain by any standard, but given that millions of consumers have become accustomed to seeing similarly generous deals from retailers thanks to the rise of group buying sites like LivingSocial and Groupon, it wasn’t exactly anything out of the ordinary.
But apparently consumers disagreed.
By the time the deal expired at 8 a.m. EST this morning, 1.3 million of these vouchers had been sold, netting LivingSocial and Amazon a collective $13 million in cash upfront in merely 24 hours, and making this the most successful online coupon campaign in history, in terms of gross revenue.
Prior to this, the biggest success story was a similar deal that Groupon offered in the summer of 2010 for half off a $50 gift card from the Gap. Customers bought up nearly half a million of these vouchers, which generated about $11 million in revenue for the two companies.
The benefits to this kind of deal are obvious. There will always be a pool of consumers more interested in a national store than a local store, since it appeals to a national audience. Moreover, consumers will generally be less hesitant to pay money in advance for a brand that they’ve purchased before, rather than making a small investment in a new local company.