Last week, daily deal service website LivingSocial.com experienced an incredible 80% spike in traffic, allowing it to close the gap on its main competitor Groupon. The main reason behind this overnight change: Amazon.
Seeking to head off a potential Google-Groupon partnership that would seriously threaten its online shopping position, Amazon strategically injected Groupon's competition with a $175 million dollar investment.
Furthermore, last week LivingSocial offered up an unprecedented 50% off of Amazon products, which led to more than 1 million Amazon vouchers being sold. With a deal as sweet as 50% off everything at Amazon, it makes sense that traffic spiked so dramatically. However one can predict that now the ploy has ended those numbers will take a bit of a tumble.
Nevertheless, the strategy worked in not only providing a boost in LivingSocial's public awareness but also garnering new signups, providing a further push in its overall growth. The timing of Amazon's and LivingSocial's gambit could not have been more pertinent, given that Google is continuing work on its own group-buying service, Google Offers, as well as Facebook developing a group-buying function of its own.
To ensure their own survival and market share, Amazon and LivingSocial have embraced the old adage "the enemy of my enemy is my friend.